RBC Capital Raises Alphabet Price Target to $375
RBC Capital analyst Brad Erickson raised the price target on Alphabet (NASDAQ: GOOGL) to $375.00 (from $315.00) while maintaining an Outperform rating.
“AI Overviews (AIO) ads now fully flowing from Pmax, Search, etc whereas AI Mode ads only for AI Max adopters where feedback remains only mixed.
Pricing didn’t increase as much as META though conversion was fine/stable.
Reduction of customer data requirement for targeting from 1k to 100 has expanded to Demand Gen enabling TAM expansion for new cohort of SMB’s to access latest model improvements for probabilistic targeting (was rolled out for Search in May of ’25).
Creating an entirely separate CTV product & auction just for the Olympics which should maximize inflation.
We expect this for newer AI surfaces as an auction inflation driver at some point but have yet to find evidence.
Broad keyword matching still being used for AI Mode & AIO (vs. exact word/phrase match), highlights difficulty/ uncertainty of those new surfaces (read for OpenAI), but expect ongoing improvement as GOOGL figures out.
We are raising our PT to $375 based on 29.5x P/’27E EPS (prior 28x based on P/’26E EPS), estimates remain unchanged.”
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