Street View: Alphabet's AI investment returns indicate a positive tone for Big Tech

Alphabet GOOGL.O reassured jittery tech investors that its AI investments were powering returns at its crucial ad business on Thursday, downplaying any impact from global economic uncertainty, for now

Shares of Google parent up 5.6% at $168.26 in premarket trading

CLOUDS ON THE HORIZON

Morgan Stanley ("overweight," PT: $185) says co needs to quickly develop and release more new large language models and GenAI-enabled products to maintain its leading position in the online ecosystem

RBC Capital Markets ("outperform," PT: $200) says although AI poses challenges, co is managing to grow its search business more sustainably, with the AI Overview helping to recover lost search volume better than expected

Wells Fargo ("equal weight," PT: $175) says co's shift to conversational search will create uncertainty and likely slow down search growth in the medium term

"Even if Google maintains search leadership, we do not expect the company to replicate its prior prosperity in the next decade", adds Wells Fargo

Goldman Sachs ("buy," PT: $205) expects the focus to be on broader digital advertising trends, including end demand by vertical and geography, due to macroeconomic uncertainty