Google Stock Price Predicted to Rise Up to 40% Amid AI Ecosystem Growth

Google's (GOOG) core search business has shown resilience despite growing competition from AI-driven tools. Analysts at Evercore ISI believe that this strength, combined with Google's expanding AI ecosystem, could drive up to a 40% rise in the stock price.

Evercore ISI analyst Mark Mahaney highlighted that Google's position as the leading search engine has actually strengthened over the past four quarters. The company's proprietary survey found that 78% of respondents chose Google as their primary search engine, while OpenAI's ChatGPT had a share of 10%. Despite its initial rise, ChatGPT's share has largely plateaued since May.

The AI push is not only driving growth in the traditional search business but also opening new monetization avenues. Mahaney noted that 60% of respondents reported searching more since adopting AI, while only 8% said they searched less. This shift is resulting in 'material new growth' in overall query volumes.

Tigress Financial Partners has raised its price target on Alphabet to $485 from $415, representing a 41% upside from Thursday's close. The firm pointed to Alphabet's AI investments as driving growth across Search, Cloud, and YouTube, while also expanding monetization channels through the Gemini app and custom chips.

While some analysts are cautious about Google's reliance on AI, Mahaney emphasizes that the company's scale, profitability, and diversified ecosystem provide a foundation for continued investment in AI. The analyst believes that Google's challenge is not just defending its search business but converting its enormous user base into additional sources of growth.