Goldman Sachs analyst Eric Sheridan has reiterated a Buy rating on Alphabet Inc (GOOG, GOOGLE) with a price target of $195. Sheridan highlighted Google’s recent Marketing Live keynote where the company outlined its vision for launching AI tools and services in the digital advertising space. Google is exploring how AI can enhance return on ad spend across various platforms and inventory, including Search, YouTube, Performance Max, and third-party platforms.
Sheridan pointed out Google’s efforts to integrate ads into AI overviews in Search, showing promising results in terms of engagement, query volume, clicks, and conversions. This early success indicates that AI can actually benefit advertisers and alleviate concerns about disruption to legacy monetization formats in the long term.
In the realm of digital and streaming video, Google showcased new video ad formats, 3P distribution deals via DV 360, unique content offerings, and user scale to attract advertisers and capitalize on changing trends in streaming and digital video consumption. This aligns with Sheridan’s 10 Internet Themes for 2024, where digital advertising stands out as an area ripe for early AI adoption and monetization.
Alphabet’s strong AI capabilities, infrastructure advantage, and scale position the company well to leverage the AI theme in the long run, providing new tools and services for users and advertisers. Sheridan remains optimistic about Alphabet’s future business and operational prospects, confident in its ability to navigate the evolving digital advertising landscape.
Despite Sheridan’s positive outlook, GOOGL shares traded down 1.11% at $175.88 as of the latest check on Wednesday. This signals potential market fluctuations and investor reactions to Google’s AI initiatives and strategic positioning in the digital advertising space.
Overall, Google’s focus on AI-powered solutions in digital advertising and streaming video, coupled with Alphabet’s technological prowess and scale, set the company up for success in capturing market opportunities and driving growth in the long term. Investors will continue to monitor Alphabet’s progress in deploying AI tools and services across its platforms and evaluating their impact on advertising revenue and market competitiveness.
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https://www.benzinga.com/news/24/05/38969014/ai-driven-growth-set-to-strengthen-googles-ad-revenue-goldman-sachs