Bank of America has reaffirmed its confidence in Alphabet (Google), maintaining a 'Buy' rating and a price target of $370 per share.
The bank's optimism is rooted in what it calls Google's "AI distribution + monetization" narrative. This is essentially a two-track strategy that appears to be working very well. On one hand, Google is successfully growing its new AI products, and on the other, it's protecting its incredibly profitable core business.
Let's break down this causal chain. First, concerning distribution, data shows Google isn't losing its grip. Statcounter's March 2026 data confirms Google's global search market share is stable at nearly 90%. At the same time, independent trackers like Similarweb show that traffic to Google's AI assistant, Gemini, is surging, capturing over 20% of the AI chatbot market. This evidence suggests Google can expand its AI footprint without harming its main search engine—a critical balancing act.
Second, regarding monetization, Google is playing a careful and strategic game. The company is testing ads within the AI-powered answers in its Search results ('AI Mode') but has publicly stated there are no current plans to place ads inside the standalone Gemini app. This approach allows Google to explore new revenue streams while preserving a trust-first relationship with Gemini users. This cautious stance is made easier by competitors like OpenAI, which has already started aggressively testing ads in ChatGPT. OpenAI's move provides Google with political cover, making its own eventual ad integration seem measured and necessary rather than greedy.
Of course, the competitive landscape is intense. Anthropic's Claude is also seeing a surge in users, indicating a dynamic market. However, Google's massive existing ecosystem, including Gemini's reported 750 million monthly active users, provides a formidable advantage in distribution and scale.
Ultimately, BofA believes this successful strategy justifies a higher valuation for Alphabet. The combination of a stable, cash-cow search business and a rapidly growing, carefully monetized AI assistant paints a compelling picture for future growth, supporting the $370 price target.
- Price Target: The projected price level a stock is expected to reach within a specific time frame, as determined by an analyst or investment firm.
- Monetization: The process of converting something (like a service or user base) into revenue.
- MAU (Monthly Active Users): A key metric used to measure the number of unique users who engage with a product or service within a month.