Scotiabank Raises Alphabet (GOOGL) Price Target to $310, Maintains Sector Outperform Ahead of Q3 Earnings

Alphabet Inc. (NASDAQ:GOOGL) is one of the AI Stocks Making Moves on Wall Street. On October 16, Scotiabank raised its price target on the stock to $310.00 from $240.00 on Thursday, while maintaining a Sector Outperform rating. The price target raise comes ahead of Alphabet’s Q3 results, set to report on October 29.

Analyst Nat Schindler anticipates Alphabet to deliver the strongest Q3 results among the Internet companies in his coverage. This growth is supported by robust growth in Google Cloud Platform (GCP) and margin expansion.

According to the firm, Alphabet is experiencing a “clear recovery” in its core advertising business, with ad growth returning to double digits. Two factors attributed to this recovery are easier comparisons and a “genuine” increase in advertiser spending.

Even though the company’s push into Shorts caused it monetization challenges for some time, ad monetization for Shorts is now leveling to the same level as traditional YouTube videos on a per-hour basis. This implies that YouTube has managed to monetize billions of views on Shorts through its AI-driven marketing.

Schindler also discussed how the new Ironwood TPU (3nm) chip has shown solid improvements over TPU v5p. These improvements will help narrow the efficiency gap with Nvidia’s (NVDA) chips.

Even though expectations are “sky-high” for Google Cloud Platform, he believes growth and margins can easily hit investor expectations.

Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.

While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 AI Stocks Analysts Are Watching Closely and 10 AI Stocks in the Spotlight This Week

Disclosure: None.