Investing.com — Pivotal Research Group initiated coverage on Google owner Alphabet (NASDAQ:) with a Buy rating, highlighting the company’s strong competitive position and growth potential in cloud computing and AI.
Google, which has about 90% of the global search market share outside China, is also known for its dominance in video/audio streaming through YouTube and its leading web browser, Chrome.
Google’s search business was deemed a monopoly in August, and the Department of Justice (DOJ) and a judge are considering remedies that could significantly impact the company’s ability to leverage its market position.
Despite this, Pivotal sees Google’s current valuation as reflecting a conservative decline in search revenue after 2027. Potential regulatory outcomes are not expected to be resolved anytime soon, but Pivotal suggests a Kamala Harris win could lead to more favorable settlements for Google .
In a separate note, Pivotal also initiated coverage of Meta Platforms (NASDAQ:) with a Buy rating, setting a target price of $780 at the end of 2025.
Meta, known for its extensive portfolio of social media platforms including Facebook, WhatsApp and Instagram, has been praised for its management’s ability to innovate and respond to competition.
“Looking ahead, we see strong revenue growth prospects from increased usage/new products/better targeting/higher pricing, driven by cost efficiencies (powered by AI) and ultimately materially declining losses from Reality Labs, combined with what appears to be an attractive valuation at 24X. 25 EPS,” crucial analysts said in the note.
The company also acknowledges risks such as potential regulation and market dominance investigations, as well as Google and Apple’s (NASDAQ:) challenges in AI. Nevertheless, the investment firm believes that Meta’s positives, including its aggressive management and attractive valuation, outweigh its potential negatives.
