RBC Raises Alphabet (GOOGL) Target on AI Advertising Momentum

Alphabet Inc. (NASDAQ:GOOGL) is one of the AI Stocks Analysts Are Watching Closely. On January 15, RBC Capital analyst Brad Erickson raised the price target on the stock to $375.00 (from $315.00) while maintaining an “Outperform” rating.

Firm analysts see AI ad rollout momentum, an expanding SMB total addressable market, and expectations that Olympics-specific CTV auction will drive future inflationary lift.

They highlighted how that AI Overviews (AIO) ads are now fully flowing from Pmax, Search, and other platforms. Meanwhile, AI Mode ads are only available for AI Max adopters with mixed feedback so far. Pricing didn’t increase as much as META, even though conversion was stable.

The tech giant has reduced customer data requirements for targeting from 1,000 to 100 users, expanding to Demand Gen and broadening the total addressable market for a new cohort of SMBs. This allows a new cohort of advertisers’ access to the latest model improvements for probabilistic targeting, following a similar rollout for Search in May 2025.

A separate CTV product and auction is being launched by the company specifically for the Olympics, which should maximize inflation. RBC anticipates this approach to extend to newer AI surfaces as an auction inflation driver.

"Broad keyword matching still being used for AI Mode & AIO (vs. exact word/phrase match), highlights difficulty/uncertainty of those new surfaces (read for OpenAI), but expect ongoing improvement as GOOGL figures out. We are raising our PT to $375 based on 29.5x P/’27E EPS (prior 28x based on P/’26E EPS), estimates remain unchanged."

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

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