BofA Securities analysts reiterated a Buy rating on Alphabet (NASDAQ:GOOGL) with a $225 price target, maintaining a bullish outlook on the company’s search business despite rising AI competition. The analysts noted that while AI-driven platforms like ChatGPT have gained traction, they do not appear to be significantly impacting Google’s search traffic or market share. Instead, AI-powered search activity is expanding, with Google continuing to capture a substantial portion of this growth.
Google’s latest earnings call reinforced confidence in the strength of its search business, with management highlighting continued volume growth fueled by AI innovations such as AI Overviews and Circle to Search. Additionally, recent industry checks indicate that ads in top positions within AI-powered search results are generating higher click-through rates (CTR), which is helping drive better monetization and search pricing.
Looking ahead, key risks in 2025 include increasing competition from AI-powered search alternatives, potential ad budget shifts toward OpenAI’s newly introduced advertising offerings, and potential regulatory challenges in both the U.S. and EU that could impact long-term investor sentiment.
Despite these uncertainties, BofA remains optimistic about Alphabet’s ability to monetize AI advancements within its core search business, reaffirming its bullish stance on the stock.
