Investing.com-- Google parent Alphabet’s (NASDAQ: GOOGL ) stronger-than-expected first-quarter results underscore improving fundamentals across its advertising and cloud businesses, Wedbush said in a research note, raising its price target on the stock.
Wedbush analysts raised their PT on Alphabet to $200 from $190, maintaining an "Outperform" rating, citing robust first-quarter results and accelerating investments in artificial intelligence (AI).
The tech giant posted first-quarter operating income of $30.6 billion, with margins expanding 230 basis points year-over-year to 33.9%, beating consensus estimates. Google Search revenue rose 9.8% year-over-year, topping forecasts, while YouTube Ads grew 10.3%, largely in line with expectations.
Wedbush analysts noted that Alphabet did not indicate any signs of ad weakness through April, easing near-term investor concerns.
However, they flagged potential headwinds this year, including reduced spending from Asia-Pacific retailers due to U.S. tariff changes, rising depreciation expenses from aggressive capital investment, and tough year-ago ad comps in financial services.
"Consensus expectations already contemplate the impact of these headwinds, in our view, and while we remain cautious across the group, we are incrementally constructive on the potential outcomes for this year," analysts wrote.
Wedbush revised its full-year estimates higher, now expecting 2025 operating income of $123.2 billion.