BofA Securities analyst Justin Post maintained a Buy rating on Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) with a price forecast of $185 on Monday.
Google kicks off Online advertising earnings season on April 24. With tough comps & tariff uncertainty, Post recently lowered his 2025 forecast.
The analyst projects first-quarter revenue and GAAP EPS of $74.1 billion and $1.93, below the Street’s $75.5 billion and $2.01, with search revenues up 7% (versus the Street’s 9%).
Also Read: Google GenAI, AI Cloud Services Drive Analyst Confidence In Long-Term Growth
He stated that the Street has been lowering expectations as business sentiment has deteriorated.
Street could be looking for 7-8% search growth, and an in-line first quarter would likely be viewed as a positive. However, a miss, even if macro-related, could fuel already elevated competitive/regulatory concerns.
With a negative tariff ad spend impact (PDD Holdings Inc (NASDAQ: PDD) Temu/Shein ad spend down), growing competitor AI traffic, and cautious 3P search data, outlook uncertainty is elevated.
For the second quarter, Post expects some spending pressure in eCommerce verticals and for YouTube brand spend. His forecasts are below the Street at revenue and GAAP EPS of $76.2 billion and $1.98 versus $79.7 billion and $2.15.
That said, Amazon’s eCommerce and Netflix’s recent ad commentary suggest some pockets of resilience, and the analyst expects Google search ad spend to perform relatively well.
First-quarter positives include near-term eCommerce ad spend strength (frontloading), low expectations given 3P reports of click share loss, and cloud strength from added capacity.
Post expects Google to see relatively less topline pressure in the current uncertain macro than peers, given its higher performance-driven ad mix (versus brand).
Also, fourth-quarter call commentary was positive on AI Overviews usage and monetization. Additionally, the analyst noted Alphabet has greater flexibility for self-help measures to optimize for EPS if macro pressures persist.
At ~$153, Post noted the stock as attractive at 16 times his lower fiscal 2026 GAAP EPS (or 10 times core business).
Price Action: GOOGL stock is down 2.84% at $146.89 at the last check on Monday.
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