Alphabet Is ‘Most Valuable Company’ on AI Strength, Moffett Says

(Bloomberg) -- Alphabet Inc. trails behind a few other megacap technology companies in size, but the Google parent may be destined to overtake them given its strong position in artificial intelligence and other key sectors, according to MoffettNathanson.

The “combination of market leadership, diversification, and scale positions Alphabet not only as a winner in the GenAI era but as a company that should rightly be considered for the title of most valuable company in the world,” wrote analyst Michael Nathanson.

Nathanson raised his price target on the stock to $295 from $230 and affirmed a buy rating touting its “clear leadership in multimodal search” among other things. The target is just under the Street-high of $300, and implies upside of 19% from Alphabet’s last close.

Alphabet shares have climbed more than 70% off an April low, as of their last close. They were 0.9% lower in premarket trading Thursday. The stock is now up more than 30% this year, nearly twice the advance of the Nasdaq 100 Index, which is up 17%. It has a market capitalization of just under $3 trillion, putting it fourth on the list of largest companies. Nvidia Corp. leads at $4.3 trillion, followed by Microsoft Corp at $3.79 trillion and Apple Inc. at $3.74 trillion.

Investors are growing confident about Alphabet’s ability to fend off competition from rivals like OpenAI. Earlier this month, a key antitrust ruling removed long-running headwinds for the company. A US district court judge enabled it to avoid the most punitive measures sought by regulators, including the sale of its Chrome browser. Meanwhile, second-quarter earnings showed demand for AI products is lifting sales. 

“Google remains the one to beat in GenAI search,” Nathanson wrote, arguing that Alphabet’s resources and distribution are advantages that OpenAI can’t match. “No longer cautious, Google has accelerated its GenAI product cycle, pushing out launches at pace. We view this as a turning point: from reactive to proactive, and now dictating the tempo of innovation.”

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