TLDR:
Google’s AI future looks promising with potential integration into iOS and focus on expense management, according to BofA analyst Justin Post. Apple’s recent AI features announcement at WWDC, including a partnership with OpenAI, could open the door for models like Google’s Gemini or Anthropic to be added in the future. Post reiterates a Buy rating for Alphabet with a $200 price target.
Key Elements:
- BofA analyst Justin Post reiterates Buy rating for Alphabet with a $200 price target, highlighting Apple’s AI features announcement
- Apple’s plans to add support for other AI models in the future could benefit Google’s Gemini or Anthropic
- Concerns about Apple’s partnership with OpenAI potentially affecting Alphabet’s stock, but potential for increased AI usage as an alternative to search
- Potential for Gemini integration into iOS for AI activities or specialized tasks
- Alphabet’s ongoing focus on expense management could lead to margin and EPS upside in 2024
Overall, Post remains positive about growing Gemini integration across the Google ecosystem and believes broader AI adoption could drive higher search usage and opportunities for incremental ad spend on the platform.