The so-called AI arms race is well on its way to being the biggest technological shift since social media. On some levels, it looks pretty bad for Alphabet (NASDAQ:GOOG) and its various properties. Especially considering what Microsoft (NASDAQ:MSFT) has done in this space. But Barclays isn’t so concerned and is putting Alphabet toward the top of its list. Investors are mildly encouraged by this support, as Alphabet stock is up slightly in Friday afternoon trading.
The word from Barclays, via analyst Ross Sandler, suggests that the AI arms race will indeed be rocky. Even for long-time mainstays like Alphabet, things are looking rough for almost everybody as the market shakes itself out. Recent declines in digital advertising, as well as competitive concerns, will keep Alphabet’s progress somewhat limited for a while. However, part of what will limit Alphabet in the short term is its own success over the last 10 years, which featured investors largely unquestioning Alphabet’s prowess in search and advertising.
However, if Alphabet can fend off the likes of Microsoft and Apple’s (NASDAQ:AAPL) Siri, then it may be able to build on its brand strength and better search quality to keep ahead of the pack once more. In such a scenario, Sandler notes that Alphabet may make a comeback as early as the second half of this year.
Not surprisingly, most analysts are in Alphabet’s camp with nine Buy ratings, making Alphabet stock a Strong Buy. Meanwhile, thanks to its average price target of $123.78, GOOG has 32.13% upside potential.
