Google likely to see boost in search volume from generative AI, Citi says
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Investment firm Citi said on Monday that it is "incrementally confident" that generative artificial intelligence will boost overall search volumes and be a positive for Google (NASDAQ:GOOG) (NASDAQ:GOOGL).
Analyst Ronald Josey reiterated his buy rating and per-share price target of $120 on Google (GOOG) (GOOGL), noting that any shift from the rise of generative AI is not likely to be "material" and that as large language models evolve to be more vertical and query costs come down, it should be a positive for the industry.
"To be sure it remains early days overall, but we note traffic to ChatGPT eclipsed Bing in Feb/March, though Bing traffic rose 21% [year-over-year] in March and despite the news flow, traffic to Google rose 3% [year-over-year] in March," Josey wrote in an investor note, referencing Microsoft's (MSFT) search engine.
Josey added that Google's Chrome browser had roughly a 65% market share at the end of March, roughly the same as it did a year-ago, citing the "strategic importance of the text box."
In addition, the analyst added he'll be looking for any updates on Bard when Alphabet (GOOG) (GOOGL) reports first-quarter earnings on April 25, as search ads held up "relatively well" in the period, according to industry checks.
A consensus of analysts expect Alphabet (GOOG) (GOOGL) will earn $1.07 per share on $68.83B in revenue.
Other items of note for Alphabet's (GOOG) (GOOGL) first-quarter results include the search and digital advertising market, usage of YouTube Shorts and how the monetization process is going, innovation in advertising, as well as expense controls and the potential for a new buyback.
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