Bank of America Reaffirms Buy Rating for Alphabet with a Price Target of $430

BlockBeats News, May 21st. Despite Google's best I/O developer conference performance in recent years, the stock price fell by 2% on the same day. Bank of America still maintains its "Buy" rating. Bank of America analysts Justin Post and Nitin Bansal, in a research report released on May 20th, reiterated their "Buy" rating for Alphabet with a target price of $430, representing a 10.9% upside from the current price of $387.66. The conclusion of the two analysts is: "Google is no longer in a catch-up phase, and Search and agentic announcements have shown a wave of product innovation."

The bullish view is based on three user metrics disclosed by Google at I/O: AI Overviews at the top of Search results already have 2.5 billion users; the AI Mode in Search's conversation layer has 1 billion users and doubles every quarter; Gemini's monthly active users have grown from 400 million a year ago to the current 900 million. Bank of America interprets this growth as "indicating that Google is successfully transitioning Search users to an AI-native experience, reducing the risk of competitive disruption."

Bank of America stated that the basis for Google's stock price reaching $430 is its 28x valuation based on expected earnings in 2027, plus Google's cash on hand. The third and fourth-quarter earnings reports of Alphabet will be the first test of whether the 1 billion AI Mode users can translate into revenue growth to support this multiple.