Why Morgan Stanley Recommends Buying Alphabet Stock Post-Google I/O: Insights from TipRanks

Alphabet (NASDAQ: GOOGL) has faced challenges recently, particularly from antitrust issues and worries about how AI might impact its search engine dominance. However, at the recent Google I/O conference, the company made a strong statement about its future in AI.

Morgan Stanley analyst Brian Nowak noted that Google is not backing down. Instead, it’s focusing on its large user base to create new, personalized search experiences. One major announcement was the launch of AI Mode, a chatbot feature for Google Search that is now available to all U.S. users. This tool will continue to improve over the next year, adding more context-aware responses, such as suggesting events based on emails.

Additionally, Google is introducing Deep Search, which promises expert-level reports on topics like sports and finance, featuring unique visualizations. Users will also have a new shopping experience driven by AI, including a feature that allows users to virtually “try on” clothes.

Nowak emphasizes the importance of making these features available for free to encourage widespread adoption, though certain advanced tools may require a subscription. For example, Google’s Gemini app has a new feature called Agent Mode that lets users automate tasks, similar to OpenAI’s functionalities.

The company also showcased Imagen 4 and Veo 3, its latest models for generating images and videos. Imagen 4 produces high-quality images much faster than before, while Veo 3 adds audio capabilities to video creation, making it more immersive.

While initial uptake of these features might be slow due to cost barriers, Nowak believes that improving Google’s AI capabilities will engage more users and create monetization opportunities for advertisers.

Nowak remains optimistic about GOOGL shares, giving a “Buy” rating with a target price of $185, suggesting a potential 10% increase. His positive outlook is mirrored by other analysts, with an average target of $197.69 suggesting a 17% increase over the year.

As AI continues to shape the tech landscape, Google is positioning itself as a leader. Whether it can maintain its edge in search while adapting to these new tools remains to be seen.



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