-- Alphabet's (GOOG, GOOGL) shares are expected to reach new highs as Google's AI-powered Search's potential to boost revenue growth stokes investor confidence, Oppenheimer said in a note Thursday.
Wall Street is "irrationally" assuming that Search revenue growth will decelerate over the next two years, the brokerage said.
Google has yet to benefit from its AI conversion enhancements, analysts said as they noted that advertisements in AI Overviews were launched globally only at the end of 2025, AI Mode ads are still in the early stages, and AI chatbot Gemini currently has no ads.
Meanwhile, revenue growth in the Google Cloud Platform is accelerating and could hit 60% in 2026, analysts said, as the company's capital spending on capacity starts to make an impact.
Google is in the early stages of using data from Search, Maps, Gmail, and Calendar to deliver agentic AI with a "claw-bot" experience, according to the note.
Oppenheimer kept its outperform rating on Alphabet stock, with a $360 price target.
Price: $335.91, Change: $-1.84, Percent Change: -0.54%