Tigress Boosts GOOGL Price Target to $485 Amid AI-Fueled Growth

Tigress Financial analyst Ivan Feinseth has raised Alphabet's (NASDAQ:GOOGL) price target to $485 from $415, citing strong Search momentum and rising Cloud growth. The AI leadership is a key growth engine across Alphabet's core businesses.

The company's integration of Gemini AI models, AI Overviews, and AI Mode into Google Search has contributed to its growth, with Google Search and other revenue increasing 17% year over year in the second quarter. AI is also becoming a major revenue accelerator as Google reported an 82% year-over-year increase in Cloud revenue in the second quarter.

Tigress Financial believes Alphabet's diversified ecosystem, technological scale, and financial resources provide a foundation for continued long-term growth. However, the company's strategy to invest heavily in AI also carries significant risks, including higher capital expenditures that could place pressure on free cash flow and profitability if AI-related revenue does not grow quickly enough.

Hedge fund positioning indicates increasing investor sentiment towards Alphabet, with 275 hedge funds holding the stock in the second quarter, up from 265 in the first quarter. Berkshire Hathaway increased its Alphabet position by 46% to approximately $28.16 billion.