2. Alphabet Inc. (NASDAQ:GOOGL)
Potential upside: 2.65%
Number of Hedge Fund Holders: 288
Alphabet Inc. (NASDAQ:GOOGL) is one of the best AI stocks to watch in May. On April 30, Raymond James raised its price target on Alphabet to $425 from $400 and maintained a strong buy rating for the stock, according to a report by TheFly. This developed as the company reported strong financial results for the first quarter of the year, mainly due to the continued acceleration in Search and Google Cloud.
On Wednesday, Alphabet reported that consolidated revenues surged 22% to $109.9 billion, marking the company’s 11th consecutive quarter of double-digit growth. The company shared that revenues from Google Services increased 16% to $89.6 billion, driven by a 19% growth in Google Search & other, 19% in Google subscriptions, platforms, and devices, and 11% in YouTube ads.
Additionally, Google Cloud posted significant revenue growth of 63% to $20.0 billion, led by increases in Google Cloud Platform (GCP) across enterprise AI Solutions and enterprise AI Infrastructure, as well as core GCP services.
Alphabet and Google CEO Sundar Pichai said the company’s year is off to a terrific start. He added:
“Our AI investments and full stack approach are lighting up every part of the business. Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth. Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion. This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App. Overall the number of paid subscriptions has now reached 350 million, with YouTube and Google One being the key drivers. Gemini Enterprise has great momentum with 40% quarter on quarter growth in paid monthly active users. And, finally, I’m pleased to see Waymo surpass 500,000 fully autonomous rides a week.”
Based on 73 analyst ratings compiled by CNN, 88% rated Alphabet’s shares Buy, while 12% rated them Hold. The stock has an average price target of $395, a 2.65% upside from the current price of $384.80.
On April 24, Google announced plans to invest up to $40 billion in Anthropic to strengthen its partnership in the race to build artificial intelligence, according to a Bloomberg report. Under the pact, Anthropic said Google is committing to invest $10 billion in cash at a $350 billion valuation, while the remaining $30 billion will be invested once Anthropic hits certain performance targets.
Alphabet Inc. (NASDAQ:GOOGL) is a holding company that engages in software, health care, transportation, and other technologies. It owns several notable platforms, including Google Search, Google Maps, Gmail, and YouTube. The company is also known for pioneering work and research in cloud computing, quantum computing, and artificial intelligence.
