Alphabet Retail Traders Bearish After Analyst Cuts Price Target On Slowing Ad Spending

Alphabet, Inc. (GOOGL) (GOOG) shares fell 1.83% on Thursday, underperforming the broader market, after an analyst trimmed the stock price target.

Guggenheim Securities analysts on Thursday reduced their price target for the Alphabet stock to $190 from $215 but maintained a ‘Buy’ rating, The Fly reported. The new price target still presents scope for nearly 16% upside from current levels.

Analysts at the firm said the model adjustment was made ahead of the search giant’s first-quarter results, factoring in modest incremental softness in the brand advertising environment and additional details on its YouTube subscription estimate.

Guggenheim said its most recent advertiser checks showed slower brand ad demand in March, with the trend likely to continue into the second quarter.

President Donald Trump’s tariffs have clouded the macroeconomic outlook as economists and analysts see upward pressure on inflation. An uncertain environment typically introduces caution among advertisers as they prefer conserving cash over spending. 

Advertisements from the search business, YouTube ads and the Google Network accounted for 87% of Alphabet’s revenue in the December quarter.

A Nielsen report released earlier this week showed that YouTube, Alphabet’s online video streaming platform, captured a record 11.6% of the time spent watching TV in February. 

Separately, Lockheed Martin Corp. (LMT) announced that its intends to integrate Google’s advanced generative artificial intelligence (GenAI) into its AI Factory ecosystem. 

The defense contractor said it sees the collaboration enhancing its ability to train, deploy, and sustain high-performance AI models alongside other leading providers, accelerating AI-driven capabilities in critical national security, aerospace, and scientific applications.

Alphabet recently announced a $32 billion all-cash deal to buy cloud security platform Wiz.

On Stocktwits, retail sentiment toward Alphabet stock remained bearish (29/100), and the message volume stayed at ‘low’ levels.

A watcher said the current quarter may see the first true effect of ChatGPT and other AI tools on Google search ad revenues. 

On the other hand, a bearish user said the stock could be headed toward the $100 level before rebounding

Alphabet stock has lost nearly 14% this year and trades off its all-time high of $208.70, hit on Feb. 4. The Koyfin-compiled consensus analysts’ price target for the stock is $218.81.

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