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Google (NASDAQ:GOOG) (NASDAQ:GOOGL) was in focus on Wednesday as several Wall Street firms highlighted the company’s renewed focus on artificial intelligence after it kicked off its annual I/O developer conference with several major announcements.
Shares slipped fractionally in premarket trading.
The investments that Google is making in Gemini and its broader generative AI strategy are evolving the current search experience to make it more natural, personal and most importantly, more useful and impactful, Citi analyst Ronald Josey said. Josey reiterated his Buy rating and $190 price target.
Examples include the Search Generative Experience launching in the U.S. this week, as well as newer search tools, such as multi-step reasoning, planning and more personalized search engine results pages, Josey said.
Google also showed off its AI Agent strategy and Project Astra, strategies bringing Gemini’s multimodality across the user experience for many of Google’s products, all of which left Josey impressed.
“Our agents show reasoning, planning and memory,” Google Chief Executive Sundar Pichai said at the event. “It can think multiple steps ahead. The power of Gemini with multimodality brings us closer to our ultimate goal of making AI helpful for everyone.”
With search revenue growth having accelerated in the first-quarter and margins expanding, Google is solidifying its position to be a leader in the generative AI space, Josey posited.
Bank of America analyst Justin Post agreed and said that Google’s pace of AI innovation has accelerated.
“We continue to see Google as a net AI beneficiary and believe growing Gen-AI integrations should likely help drive higher usage and incremental spend across Search, Cloud and Workspace,” Post wrote in an investor note. He maintained his Buy rating and $200 price target.