Alphabet price target upped on view AI voice search integration will complement offering

Google parent company Alphabet Inc (NASDAQ:GOOG) saw its price target upped by Oppenheimer analysts on their view the stock remains attractive ahead of the company’s first quarter results amid mixed to bearish sentiment.

Oppenheimer highlighted that, contrary to investors’ fears that GenAI could replace search, the results of their recent survey suggest the use of AI assistants could increase search frequency.

The survey on search and AI user behavior suggested that Apple Inc (NASDAQ:AAPL, ETR:APC)'s integration of Google’s AI tool Gemini would increase the number of searches if Siri delivers Gemini results.

It showed 31% of respondents currently use voice assistants regularly and more than half, 53%, would use voice search more often than text search if voice search improved.

The analysts highlighted that this implies voice search could be meaningfully incremental to overall search frequency as the technology improves. 

Survey participants placed the highest importance on quick, accurate and in-depth responses which search already provides in its current form.

“Our survey indicates search remains the best at satisfying consumer use cases, with GenAI a complement versus substitute to search, and survey also indicates Google's search dominance would continue if the government ended Apple exclusivity agreement,” they wrote.

“75% of iPhone users would choose Google if required to select a default search engine. Similarly, if Apple defaulted iPhones to an alternative search engine, 78% of iPhone users would download Chrome and use Google search through that browser instead.”

The analysts increased their price target on Alphabet stock from $172 to $185 and awarded it an ‘Outperform’ rating.

“Price target assumes 24x 2025 earnings per share (EPS) estimate, in line with the Nasdaq, which Alphabet should grow into as search fears subside,” they wrote.

“Besides earnings, we note Google I/O on May 14 as a potential catalyst to display the new version of Gemini.”

Alphabet shares traded hands at about $155 on Monday morning.