October 1,2024

Pivotal Research recently initiated coverage on Alphabet Inc. raised its rating to a ‘Buy’ while
giving it a target of $215. The firm’s breakdown of the Alphabet business model illustrates how
the firm has a leading 90% share of the core search outside China and has high opportunities to
be the market leader in consumer AI Assistant use, which can act as a major catalyst for
development.
Alphabet’s is the third largest player in cloud computing and its large with relatively low levels
of people offloading enterprise workloads. Further, it is globally dominating in the ownership of
YouTube and very popular Chrome browser, which entrenches its competitive advantage.
Measures like possible future workforce cutbacks would also improve financial growth,
however, higher levels of Traffic Acquisition Costs (TAC) are likely counterproductive. Other
risks such as trials related to monopolization of advertisement spaces and anti-competitive
actions may pursue this company, but their effect on the stock performance will not be
significant.
All thing considered, Alphabet’s solid balance sheet, progress in AI, and capital expenditures are
the ingredients for stock appreciation.