-- Alphabet's (GOOG/GOOGL) progress integrating its Gemini AI models could lift Q1 results, with potential gains in both search and cloud as advertisers benefit from better targeting and efficiency, BofA Securities said Wednesday in a report.
BofA expects Q1 EPS of $2.69 on revenue of $92 billion and sees Q2 EPS of $2.80 on revenue of $98.3 billion. The firm said search growth picked up during the quarter, while cloud revenue is expected to rise 49% from a year earlier.
Alphabet is positioned for strong growth and improving cloud margins as it rolls out new AI models, custom silicon, and broader consumer and enterprise distribution, BofA said.
E-commerce spending likely accelerated in Q1, and BofA's checks suggest no major disruptions to ad budgets despite geopolitical uncertainty, the report said.
BofA reiterated its buy rating on Alphabet stock with a price target of $370.
Q1 results are due Wednesday.
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