10 AI Stocks Investors Should Keep on Their Radar

3. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 219

Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Investors Should Keep on Their Radar. On August 26, Bernstein reiterated a “Market Perform” rating on the stock with a $210 price target.

The firm discussed how Google reported strong results in Q2, with revenues growing 14% year-over-year and every business such as Search, YouTube, Cloud, and SP&D witnessing accelerating growth.

Google’s AI features are gaining traction, with AI Overviews now being used by over 2 billion people.  Overall, the company needs to continue driving growth in Search and paid clicks and while Google’s aggressive strategy is respectable, the firm remains cautious for now.

“Google (Market-Perform, PT $210): In isolation, Google delivered strong results in Q2, Revenues grew +14% Y/Y [15% FxN] with every business unit seeing accelerating growth: Search and the scrutinized paid clicks grew +12% and +4% Y/Y respectively. Management offered numerous encouraging AI engagement data points led by AI Overviews hitting 2B+ MAUs up from 1.5B last quarter, while driving a 10% increase in queries for the types of searches that use overviews. YouTube (+13%), Cloud (+32%), and SP&D (+20%) all beat and contributed to solid top-line performance. However, in comparison to peers that reported exceptional beats, Google’s 2Q earnings looked more in line. Looking ahead, top-line growth obviously matters and Google must deliver there in 2H for the stock to work. Perhaps inadvertently, but by sharing paid click growth on the earnings call, Google now must not only deliver on Search revenue growth, but also on paid clicks. We expect the Search remedy verdict any day now and still view the event as a cleaning event once the dust settles, but understand investor fears. So while we’re increasingly more constructive on Google, and really like this more aggressive version of the company, we’re practicing patience and optimistically watching to see where things shake out. We remain Market-Perform.”

Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.