This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
While Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) is one of the oldest internet-related companies operating, it remains among the most popular. That popularity helps the company's search business continue to generate significant revenue growth, plenty of cash, and solid profitability (a situation unlikely to change).
But search isn't the only machine keeping this company on the road to growth, at least according to one analyst. Although he recently made a slight cut to his price target, he still feels the tech giant's shares have plenty of upside.
A cloudy future is not necessarily a bad thing
In mid-March, John Blackledge of TD Cowen (a division of Toronto-Dominion Bank), issued an updated report that trimmed his prior price target. Blackledge now believes Alphabet's Class C shares (the ones traded under the GOOG ticker symbol) will rise to $210 over the next year, down a bit from his previous estimation of $220.
Despite the drop, Blackledge is still very bullish on Alphabet, and he left his buy recommendation intact. And why shouldn't he? Even at that reduced price target, the anticipated upside is over 30% from the stock's midday price on Tuesday, March 18.
The analyst's latest take on the stock, according to reports, is based on his anticipation that the company will ramp up its spending on artificial intelligence (AI). He believes this will particularly enhance Alphabet's already strong Google Cloud business, giving it a competitive advantage in what is currently a crowded segment of the tech industry.
Many fingers in many pies
One of the benefits of owning Alphabet stock is that management has various levers it can pull to produce more growth. It's not only involved in AI and the cloud, it's also a leader in autonomous driving technology and other potentially strong businesses.
Meanwhile, no one's going to knock it off its throne as the king of search. I fully agree with Blackledge's buy recommendation.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
