Analyst Brian Nowak from Morgan Stanley maintained a Buy rating on Alphabet Class A (GOOGL – Research Report) and keeping the price target at $185.00.
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Brian Nowak has given his Buy rating due to a combination of factors that highlight Alphabet’s strong position in the tech infrastructure space. One of the key reasons is the potential partnership between OpenAI and Google Cloud, where OpenAI is expected to utilize Google’s TPUs for its inference workloads. This move is seen as a significant endorsement of Google’s AI infrastructure capabilities, which have been developed over the past decade. The partnership not only underscores Google’s leading position within the ASIC ecosystem but also suggests a potential acceleration in Google Cloud’s growth, which is not yet fully reflected in Alphabet’s stock price.
Furthermore, Nowak points out that while NVIDIA’s GPUs are currently the dominant choice for tech enterprises, the increasing familiarity and adoption of Google’s TPUs could drive further growth for Google Cloud. This shift presents a potential opportunity for market share expansion beyond the current expectations. Overall, these developments reinforce Alphabet’s competitive edge and growth prospects, justifying the Buy rating.
In another report released on June 27, Barclays also maintained a Buy rating on the stock with a $220.00 price target.