Alphabet Gets JPMorgan’s Vote of Confidence After Google I/O

Key Points

• Alphabet stock is down almost 11% YTD, underperforming peers due to concerns over search competition, regulation, and the pace of AI monetization.
• Google I/O 2025 spotlighted significant AI advancements, including Gemini 2.5, Project Astra, and new developer tools, signaling Alphabet’s aggressive push to lead the AI industry.
• Analysts and institutions remain bullish, with JPMorgan reiterating an Overweight rating and nearly $96B in institutional inflows over the past year.

Alphabet Inc. NASDAQ: GOOGL has had a bumpy ride in 2025. While peers continue to ride the AI wave and outperform the market, Alphabet has struggled to keep up. Shares are down close to 11% year-to-date, underperforming the broader market and the technology sector.

Concerns over competitive pressure in search, regulatory overhang, and questions about how quickly the company can pivot to AI-driven monetization have weighed on investor sentiment.

Yet despite these challenges, Alphabet is far from standing still. Recent developments suggest the company is gearing up for a significant comeback and domination, particularly in artificial intelligence. 

At its highly anticipated Google I/O 2025 conference, Alphabet made a flurry of AI-related announcements that showcased the company’s technical firepower and signaled its intent to lead in next-generation computing. JPMorgan analysts took note, reiterating their Overweight rating on GOOGL and maintaining a $195 price target following the event.

Google I/O Highlights: AI at the Center

The Google I/O 2025 developer conference clarified that Alphabet’s AI ambitions are more than just hype. The spotlight was on Gemini, Google’s AI platform, which is quickly becoming a key pillar of its long-term strategy. CEO Sundar Pichai announced that Gemini now serves over 400 million monthly users and has attracted more than 7 million developers globally, a sign of growing traction and adoption.

Major updates included the launch of Gemini 2.5 models, Flash and Pro, with improved reasoning capabilities, better multimodality, and tools for advanced code generation. New features such as “Deep Think” mode and the Gemini Ultra Plan, which bundles premium AI access with 30TB of cloud storage, are designed to attract enterprise users and developers.

Google also unveiled a suite of AI-powered tools across its product ecosystem, from a conversational AI mode in Google Search to a Gemini browsing assistant in Chrome. The company also announced “Project Astra,” an all-purpose AI assistant capable of real-world task execution, like managing a calendar or diagnosing bike issues.

Developer tools were another key focus. Google introduced Gemini Code Assist, a coding co-pilot designed. The no-code app development tool lets developers build from prompts or designs. These announcements collectively signal Google’s aggressive push to create a robust developer ecosystem around Gemini.

Expanding Into XR and Generative Media

Beyond core AI and cloud, Alphabet also made significant strides in extended reality (XR) and generative media. Through partnerships with Samsung and XREAL, the company is advancing into smart glasses and mixed-reality headsets. Project Starline, now rebranded as Google Beam, takes videoconferencing to the next level with 3D video calls and real-time translation.

On the creative front, tools like Veo 3 for AI-generated video and Imagen 4 for high-fidelity image generation position Google as a major player in generative content. 

Analyst and Institutional Support Building

The bullish takeaway from the I/O conference wasn’t limited to JPMorgan. Of 40 analysts covering GOOGL, 30 currently rate the stock as a Buy, with the rest leaning toward Hold.

The average 12-month price target is $199.75, implying a nearly 19% upside from current levels. Analysts widely agree that while near-term uncertainty remains, Alphabet’s AI investments and product integration could drive long-term upside.

Institutional investors are also positioning for a rebound. Over the last 12 months, GOOGL has seen $95.7 billion in institutional inflows versus $52.4 billion in outflows, yielding a substantial net inflow.

In Q1 alone, $18 billion flowed into the stock. Bill Ackman’s Pershing Square increased its GOOGL position by 11.33% last quarter, now holding 4.4 million shares, another vote of confidence in Alphabet’s trajectory.

The Stage Is Set for GOOGL’s Comeback

While Alphabet’s stock performance in 2025 has been disappointing, the story is far from over. The company’s aggressive AI push, underscored by a strong showing at Google I/O, suggests it’s still in the race to lead the future of tech. With strong institutional support, bullish analyst sentiment, and an attractive valuation relative to its peers, GOOGL may be setting up for a comeback that investors won’t want to miss.