Citizens reiterates Alphabet stock rating on AI model growth

Citizens analyst Andrew Boone has reaffirmed a Market Outperform rating and set a $515.00 price target on Alphabet (GOOGL) stock. Over the past year, Alphabet's stock has experienced a 68% increase, currently trading at $344.82 with a P/E ratio of 17.32. While the company appears slightly overvalued, it maintains a strong financial health score.

Boone pointed to the rapid growth of AI models as a positive indicator for cloud providers AWS and GCP, as revenue in these sectors is expected to benefit from the increased utilization of these models. Additionally, Boone reiterated a Market Outperform rating on Amazon (AMZN) with a $315 price target, emphasizing that demand for compute remains tight in the near term.

Alphabet has recently achieved a significant milestone with its Gemma family of AI models, which has surpassed one billion downloads in just two years, showcasing the widespread adoption of these models in various industries. The company also introduced new features across Search, Discover, and Google News, giving users more control over their content consumption.