Analysts are raising their outlook for Alphabet, pointing to the resilience of Google’s core search business despite the rise of AI-driven competition and the company’s growing AI ecosystem as key sources of future growth.
Evercore ISI has highlighted Google’s strengthening search position and Gemini’s gains against ChatGPT even as Tigress Financial has pointed to AI-led opportunities across Search, Cloud and YouTube, alongside new monetisation avenues from Gemini and custom AI chips.
Google’s search business is not only weathering the rapid rise of artificial intelligence tools but appears to be strengthening its position, according to Evercore ISI analyst Mark Mahaney.
The company’s position as the leading search engine “has actually strengthened” over the past four quarters after reaching a low point in 2024 and early 2025, Mahaney said in a Wednesday note based on his firm’s proprietary survey, MarketWatch reported.
He raised his Alphabet price target to $450 from $420, which represents an over 30% upside to GOOG’s Thursday close.
Google was selected as the primary search engine by 78% of respondents in the August survey, highlighting the continued scale of its search franchise despite growing competition from AI-powered services.
OpenAI’s ChatGPT remains the “clear long-term share gainer”, Mahaney said.
However, its share has declined from an August 2025 peak of 13%. In the latest survey, 10% of respondents identified ChatGPT as their main search mechanism, while its position has “largely plateaued” since May 2025.
AI is driving more search activity
The survey also challenges concerns that Google’s AI push could ultimately undermine its traditional search business.
Mahaney said 60% of respondents reported “that they search more since adopting AI”, compared with only 8% who said they searched less.
Google’s deployment of AI across search has resulted in “material new growth” in overall query volumes, according to Mahaney.
AI is also helping advertisers identify higher-converting leads, potentially strengthening the commercial value of search traffic.
Across commercially focused queries, Google’s position “remains scaled and broadly stable”, he said.
The search engine retained its position as the “first stop” for users looking to buy flights and hotels, find services, search for vacation ideas, select restaurants and plan trips.
Google was also the leading choice across every age group covered by the survey.
The findings suggest that while AI is changing how users interact with information, it has not yet displaced Google’s dominant role in commercial search.
Gemini closes in on ChatGPT
Google is also narrowing the gap with OpenAI in the broader AI services market.
Mahaney said the difference between the share of respondents choosing ChatGPT and Google Gemini had fallen to three percentage points.
That was a “record low” for the survey, compared with an 11-point gap between the two AI services in August 2024.
The improvement in Gemini’s position, combined with the resilience of Google’s core search business, has given Mahaney “increased conviction in Google search’s growth outlook”.
Tigress Financial raises target to $485
Separately, Tigress Financial Partners raised its price target on Alphabet to $485 from $415 while maintaining its Strong Buy rating, Investing.com reported.
This represents an over 41% upside from Thursday’s close.
The firm pointed to Alphabet’s AI investments as a driver of growth across Search, Google Cloud and YouTube.
It highlighted strong second-quarter results, including continued Search momentum, accelerating Cloud growth, margin expansion and wider opportunities to monetise AI.
Alphabet’s reported P/E ratio stands at 17.38, while its PEG ratio is 0.15, according to the firm’s analysis, suggesting attractive growth relative to its valuation.
The stock is flat over the last month and has risen about 9% this year.
Tigress Financial said Alphabet’s AI investment cycle could temporarily weigh on returns on capital, but argued that the spending is positioning the company for faster economic profit growth.
It also said AI is expanding Search and improving advertising performance.
AI investment creates new growth channels
Beyond Search, analysts are watching Google’s broader AI ecosystem for additional sources of growth.
Mahaney identified the Gemini app, sales of Google’s custom chips to external customers and Waymo’s autonomous-vehicle business as emerging opportunities.
The next Gemini model release could become another catalyst if it can outperform leading models from OpenAI and Anthropic, he said.
Investors will also be monitoring demand for Google’s custom chips and whether its Gemini Spark AI assistant can gain traction with consumers.
Tigress Financial similarly highlighted Gemini, Google’s Tensor Processing Units and AI services as potential new monetisation channels.
The firm said Alphabet’s scale, profitability and diversified ecosystem provide a foundation for continued investment in AI while maintaining financial strength and shareholder returns.
Together, the analyst views point to a shifting AI landscape in which Google’s challenge is not simply defending Search from new competitors, but converting its enormous user base, computing infrastructure and AI capabilities into additional sources of growth.
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