Alphabet’s (NASDAQ:GOOGL) annual developer event (I/O) will take place next week (May 19-20) and should provide the search giant with an opportunity to strengthen confidence in its AI positioning.
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The event is developer-focused and is unlikely to include financial updates, but BofA’s Justin Post, an analyst ranked among the top 2% on Wall Street, expects a wide range of AI announcements. These are likely to center on next-generation Gemini LLM capabilities, operating system enhancements powered by Gemini, deeper integration of Gemini across Google products, improvements to search functionality, and expanded smart glasses features.
Agentic AI is also expected to be a “top theme.” Reports suggest Google is working on expanded agent-like capabilities across Chrome, Gmail, Maps, Calendar, Search, and Android, enabling Gemini to autonomously handle tasks such as booking reservations, managing calendars, completing forms, and supporting shopping workflows.
There are also indications that Google could introduce broader AI assistant features, including persistent memory, stronger contextual awareness, live camera-based interaction, and more proactive assistance. In Chrome specifically, AI-powered browsing could allow Gemini to interact directly with websites and execute multi-step workflows, while still requiring user approval for sensitive actions such as transactions.
Post thinks there’s potential for Google’s agentic AI updates to “fuel AI disruption overhang,” particularly for platforms dependent on direct traffic, search-driven discovery, and transaction-based take rates.
A large-scale consumer agent launch could raise questions about long-term “direct traffic flows,” even if some companies are positioned as partners within Google’s broader ecosystem. The main risk is that more advanced transaction capabilities could gradually reduce direct user engagement with certain platforms.
That said, Post thinks broad adoption of agent-based systems is likely to take years rather than quarters, and he expects consumers will still value the speed, pricing, and service quality offered by “best of breed” eCommerce, travel, and delivery apps. “We would expect Booking and Expedia to be key partners in any agentic announcements around travel, while we would not expect Amazon to be an early partner for eCommerce,” the 5-star analyst said.
With AI momentum now a “top driver” for the stock, Post will be looking out for several “potential positives.” These include continued Gemini LLM innovation that will support both Google Cloud adoption and stronger consumer engagement, alongside broader improvements across Google’s product suite driven by deeper AI integration. Additionally, enhancements to AI Mode and Gemini utility could help reinforce Google’s position as a “starting point” for AI-related activity. Lastly, progress in smart glasses capabilities could also “build excitement” ahead of a potential 2H release. “With Google now valued at close to 27x 2027E EPS, ‘AI surprises’ are likely needed to drive further multiple expansion,” the 5-star analyst summed up.
All told, Post maintained a Buy rating on the shares, backed by a price objective of $430, implying the stock will gain 8% over the coming months. (To watch Post’s track record, click here)
The Street’s average target is only slightly lower; at $426.44, the figure makes room for one-year returns of 7%. On the rating front, based on a mix of 28 Buys and 5 Holds, the analyst consensus rates the stock a Strong Buy. (See Alphabet stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.