J.P. Morgan analysts have recently named Alphabet, the parent company of Google, as one of their top picks for the year 2024. This announcement has led them to increase their target price for Alphabet's stock from $150 to $160. In premarket trading, the company's shares experienced a slight uptick of 0.6%, reaching $133.28.
According to J.P. Morgan, Alphabet's strong advertising growth, expanding profit margins, and the advancements made in their new Gemini Ultra artificial intelligence product are key factors that contribute to the expectation of greater gains in stock price. Previously, Google had been considered to be falling behind in generative AI after Microsoft integrated ChatGPT with its search engine Bing earlier this year.
In a recent publication titled "Internet 2024 Outlook," the analysts led by Doug Anmuth expressed their optimism about the potential impact of Gemini Ultra, stating that it represents a significant innovation that could help close the generative AI gap by early 2024. As a result, they have decided to maintain their Overweight rating on Alphabet's stock.
Last week, Google announced the upcoming launch of three versions of Gemini, with the most powerful version set to be released early next year.
Despite these positive developments, there are still some risks associated with Alphabet's stock. The company recently lost a lawsuit filed by videogame developer Epic Games, the maker of Fortnite. This legal defeat could potentially force Alphabet to open up or reduce fees for its Google Play app store.
Overall, J.P. Morgan's endorsement of Alphabet as a top pick for 2024, coupled with the projected benefits of Gemini Ultra, highlights the potential for growth and continued success for the parent company of Google.
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