Alphabet Inc (NASDAQ:GOOG)'s second-quarter earnings got a guarded thumbs up from Goldman Sachs, which sees potential for the search engine giant to grow and margins to rise.
In the second quarter, Google Search was ahead of consensus estimates and cloud revenue was boosted by billions of dollars of AI-related revenues, while YouTube is facing tougher comparatives going forward.
Longer term, Goldman noted that the Google owner’s management is optimistic about how the Search product will continue to evolve.
Alphabet's exposure to broader digital media consumption trends and generative AI is also a core part of the investment thesis.
Buy with a US$217 price target is the bank’s view.