Truist Keeps Buy Rating on Alphabet (GOOGL), Sees Value in Key Brands

On Tuesday, June 3, Truist Securities analysts maintained a “Buy” rating on Alphabet Inc. (NASDAQ:GOOGL) with a price target of $200.

Truist Securities’ analysts noted how Alphabet Inc. (NASDAQ:GOOGL) is changing its approach to search advertising, especially by increasingly utilizing AI.

Truist Keeps Buy Rating on Alphabet (GOOGL), Sees Value in Key Brands

A laptop and phone open to Google’s services in an everyday setting.

While Alphabet Inc. (NASDAQ:GOOGL) is best known for its leading search platform, it is also recognized for several other important market-leading brands like YouTube, Cloud, and Waymo.

According to analysts at Truist Securities, these brands each present a strong investment case. The analysts analyzed these businesses separately, using discounted cash flow (DCF) and peer multiples to value them.

Truist Securities’ analysis indicates that Alphabet Inc. (NASDAQ:GOOGL) is currently undervalued when looking at the sum of its parts (SOTPs). This is an important insight, particularly because the Department of Justice has filed an antitrust lawsuit against Alphabet Inc. (NASDAQ:GOOGL) to seek a potential forced sale of some of its businesses.

Truist Securities highlighted the importance of assessing the company’s diverse business segments separately. The analysts believe that Alphabet Inc.’s (NASDAQ:GOOGL) strong mix of brands continues to offer compelling investment opportunities.

While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.