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Citizens lowers the target price of GOOGL before the Alphabet financial report, but still maintains a bullish stance
Businessinsider
1h ago
Ai Focus
Alphabet will announce its third-quarter results on October 28th. Citizens Analyst Andrew Boone has maintained a "buy" rating for GOOGL, but has lowered the target price from $515 to $450, stating that Google still holds an advantage in the AI sector, however, its search business faces execution risks due to competition from AI agents.
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Tech giant Alphabet ( GOOGL ) will announce its third-quarter earnings on October 28th. Before the release of the 2026 third-quarter financial report, Citizens analyst Andrew Boone reiterated his "buy" rating for GOOGL's stock, but lowered the target price from $515 to $450. This five-star analyst believes that Google is still in a favorable position in the field of artificial intelligence, but also warned of execution risks.

In addition, Boone holds a "slightly more cautious" view on the search business, due to the increasing competition from AI proxies. The analyst expects Alphabet to report strong performance. However, he believes that given the growing concerns in the market regarding the search business, the stock price reaction will depend more on management's comments than on the financial results themselves.

Among the over 12,500 analysts tracked by TipRanks, Boone ranks 550th. His success rate is 54%, and the average return on each rating is 12.80%.

Citizens's expectations for GOOGL's third-quarter performance in 2026

Boone expects that, driven by favorable pricing and utilization rates, Alphabet's cloud business performance in the third quarter of 2026 will exceed expectations. However, due to a relatively high base, he anticipates that the search business performance will be roughly in line with expectations. Meanwhile, Boone considers YouTube to be a "variable" factor, as the related negative factors are subsiding, while advertising spending for the mid-term elections in the United States is on the rise.

This analyst expects that investors will pay attention to management's comments on how the intensifying competition among AI proxies will affect the search business, as well as market concerns regarding the return on high AI capital expenditures. Despite execution risks and other challenges, Boone remains optimistic about Google, as he believes that Google is "in a favorable position in all AI areas." The analyst mentioned the prospects of Gemini in 4 Argon cutting-edge AI areas, as well as the demand from third parties for Google Cloud. In addition, Boone believes that Google's distribution capabilities, formed through Android and Chrome, may make it the "most intuitive and user-friendly provider of proxy products."

Overall, Boone believes that, given Alphabet's dominant position in search, AI, and the online video sector, GOOGL's stock should enjoy a valuation premium relative to the broader market. The analyst is also optimistic about the company's substantial stake in Waymo.

GOOGL Is it worth buying stocks now?

Overall, Wall Street has given a consensus rating of 'Strong Buy' on the Alphabet stock, based on 23 'Buy' and 4 'Hold' ratings. The average target price for the GOOGL stock is $427.16, which indicates a potential upside of 33.4%. However, the stock has only risen by 2.5% since the beginning of the year.

Author: TipRanks

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