Googel stock | AI | Search engine

Google AI Praised as Alphabet Stock Rises. A ‘Great Opportunity’ for ‘Anyone Brave Enough.’

By Adam Clark

Updated May 21, 2025, 12:21 pm EDT / Original May 21, 2025, 7:09 am EDT

 Google-parent Alphabet 

GOOGL

+3.87%

 unveiled a flurry of artificial-intelligence features at its developers conference on Tuesday. Analysts were impressed, but the stock market took a day to catch on.

But catch on it did. The headline announcements on Tuesday included the introduction of “AI mode” to Google’s search engine for U.S. users and a premium AI subscription. That came alongside many features such as 3-D video calls, real-time language translation and digital assistants, as well as a new line of smart glasses.

While Alphabet stock fell 1.5% on Tuesday, its shares were up 4.7% at $171.67 in afternoon trading Wednesday.

Wall Street analysts said the event showcased the company’s strength in AI development. The conference “reoriented investors back to first principles, i.e., AI success requires a combination of engineering, infrastructure, and distribution, and Alphabet is well positioned across these areas,” wrote KeyBanc analyst Justin Patterson in a research note Wednesday.

Patterson has an Overweight rating and $195 target price on Alphabet stock.

Google said its “AI Overviews” feature has 1.5 billion monthly users and the evidence is that users shown such summaries subsequently use its search engine more frequently.

“We believe these enhancements will resonate with users and attract advertisers through higher quality leads and improved monetization potential,” wrote CFRA Research analyst Angelo Zino.

That could help calm some fears about declining usage, triggered earlier this month when an Apple 

AAPL

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 executive testified in a Department of Justice lawsuit against Google that searches in the iPhone maker’s browsers fell for the first time in April.

“Google is about to go through a tricky time as doubters call into question its search business, and there is a possibility that its shares get hit hard if the numbers wobble before getting back on track,” wrote independent analyst Richard Windsor. “This would represent a great opportunity in Google for anyone brave enough to take the other side of the permanently skittish market.”