Citizens JMP analyst Andrew Boone last night upgraded Alphabet (GOOG) (GOOGL) to Outperform from Market Perform with a $220 price target. The firm says artificial intelligence is a “net tailwind” for the company, with ChatGPT’s impact too small today to move enough queries away from Google to materially impact results. AI is expanding the search opportunity by answering a broader array of queries and extending monetization as AI better infers user intent, the analyst tells investors in a research note. Citizens sees the “AI Overview tailwind overwhelming ChatGPT share loss headwinds” for Alphabet. Assuming Google’s 10% query growth holds as AI answers a broader set of questions and offers better answers, Google may see a mid-single-digit query growth tailwind in Q3, contends the firm. AI is helping the company to further monetize search as it better understands intent, widening the monetization funnel of search, says Citizens JMP.
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