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Alphabet’s (GOOGL), the parent company of Google, led several other adtech companies and AI stocks to higher prices on Friday after showing signs that AI features were working.
Alphabet’s Class-A shares jumped 4% to $166 before recent trading pared gains. Shares in several other tech firms that specialize in digital advertising and use AI tools, including Meta Platforms(META), Pinterest(PINS), Snap(SNAP), AppLovin(APP), also gained. (Read Investopedia’s live coverage of the market action today here.)
Google parent reported quarterly earnings better than expected Thursday. Sundar Pichai, CEO, told investors Google Search growth had been driven by the “engagement we are seeing with features such as AI Overviews, that now has 1.5 billion monthly users” in less than a year of its launch.
After the results were released, several analysts including those at Citi, Wedbush and BTIG raised their price targets, citing the AI potential of the stock. Bank of America analysts also raised their price targets, stating that Wall Street may be underestimating the opportunities related to search features, such as AI Overviews, and AI-driven demand for cloud services.
This trend could indicate more growth for companies with cloud-based businesses and digital ad businesses. Several are set to report earnings over the next few weeks. Snap will report earnings on Tuesday. Meta, Microsoft, and Amazon are scheduled to follow on Wednesday. AppLovin is scheduled to release results the following Wednesday, May 7m with Pinterest's report due a day later.
