Google’s at a transitional point; AI is both good and bad for them – Rosenblatt

AI development presents both opportunities and challenges for Alphabet (NASDAQ:GOOGL), (NASDAQ:GOOG), according to Barton Crockett, Rosenblatt Securities senior research analyst.

During a CNBC interview, Crockett said he has a neutral rating and an $189 price target on the company. He explained that his position weighs potential risks to Google’s core search business against strengths in growing areas like Google Cloud, where AI is driving significant expansion.

“AI is both good and bad for them potentially, and we’ve got to see how they navigate through all this stuff,” he said. His neutral stance, adopted about a year ago, reflects ongoing uncertainty about how Google will adapt to rapidly evolving AI technologies.

The competitive landscape has shifted dramatically, with companies like OpenAI and Meta (META) now rivaling Google’s capabilities in the AI space. While Google has introduced products like Google Beam and reported 400M Gemini users, questions remain about how advertising will function on AI platforms and whether Google can maintain its historical dominance.

Beyond technological concerns, Crockett highlighted risks from the antitrust trial that could potentially limit Alphabet’s (NASDAQ:GOOGL), (NASDAQ:GOOG) ability to leverage key distribution channels, including preferred placement on iPhones.

Despite acknowledging Alphabet’s fundamental strengths, the analyst concluded that market fears about AI disruption make it reasonable for investors to look elsewhere.

“It’s all right not to make Google the next place to put your next dollar.”