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It’s time to move to the sidelines on Alphabet as competition ramps up, according to Bernstein. The firm downgraded the tech giant to market perform from outperform Monday with a $125 per share price target — which represents or roughly 6% upside over the next year. The rise of AI has helped lift Alphabet more than 31% from January. Bernstein’s downgrade, however, follows a similar move from UBS a day earlier citing similar concerns . GOOGL YTD mountain Alphabet stock has added more than 31% this year. “While the headlines are AI-focused, we see increasing competition from retail media, share-shift back to Meta, and yes, some Gen AI pressure capping near-term search growth,” analyst Mark Shmulik wrote. Shmulik added he thinks Alphabet may be pushing too hard to merge generative artificial intelligence into its main search business. “Google’s aggressive push to integrate Gen AI into core search results could create a near-term air pocket on search ad pricing,” he noted. Another issue that could cap Alphabet’s gains is its valuation, the analyst said. “To many investors (and sell-siders), Google’s stock is akin to a warm hug,” Shmulik said. “Yet every so often Google’s stock appears fairly valued just as it does today, with a balanced risk/reward and narrative that has quickly caught up to fundamentals, driving Google’s stock up +40% from November lows. It’s time to move to the sidelines.” — CNBC’s Michael Bloom contributed to this report.
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