Wells Fargo analyst Ken Gawrelski has maintained their neutral stance on GOOGL stock, giving a Hold rating today.
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Ken Gawrelski has given his Hold rating due to a combination of factors impacting Alphabet Class A’s stock. The company’s recent quarterly performance showed solid growth in search revenue, accelerating from the previous quarter. However, the overall advertising segment did not meet bullish investor expectations, with YouTube ad revenues particularly underperforming. The upcoming decision on the search remedy case is anticipated to be a key catalyst, with a benign outcome expected, although there is a low probability of a forced Chrome divestiture.
Additionally, while the cloud segment showed strong performance, driven by core cloud services rather than AI, supply constraints are expected to limit further utilization of the backlog. The significant increase in capital expenditure guidance, primarily due to the AI investment race, suggests ongoing financial pressure, although cash tax benefits are expected to offset some of the impact on free cash flow. These mixed signals, including revised forecasts and increased price targets, contribute to the Hold rating as the market assesses these developments.
In another report released today, UBS also maintained a Hold rating on the stock with a $192.00 price target.