Analysts at various firms provided their takeaways following the first day of Alphabet (NASDAQ:GOOGL) owned Google's annual Cloud Next event.
The event kicked off with a keynote from Thomas Kurian, CEO of Google Cloud), virtual participation from Sundar Pichai, CEO of Alphabet, and the CEOs of Uber, Goldman Sachs, Mercedes Benz, and Palo Alto Networks.
Analysts noted the keynote was heavily focused on Gemini and generative AI applications, including ways Google Cloud is integrating Gemini into various areas of Cloud and Workspace. "We believe the focus on Gemini & Gen AI applications is the natural next step, and customer adoption & usage of Gemini & Gen AI-powered offerings should support strong Google Cloud growth — we project +24% reported Google Cloud revenue growth in 2024 & +22% in 2025," wrote analysts.
Analysts at Citi believe that Google Cloud Next 2024 highlights Alphabet's transition from experimental GenAI features to fully established Gemini-enabled cloud offerings. "We were impressed to hear that 60%+ of funded GenAI startups and nearly 90% of GenAI unicorns are Google Cloud customers and to date, 1M+ developers have built with Google's GenAI tools," said the bank. "We believe Google's AI product cycle is accelerating across both its core search and GCP businesses."
Wedbush came away from the event "encouraged by Google's progress, both in developing its AI capabilities and commercializing early enterprise solutions." The firm continues to highlight the strength of Alphabet's competitive positioning more broadly, while it also noted that Google described the opportunity for generative AI agents as "tremendous."
Bank of America thinks the Cloud AI cycle could be underappreciated for the industry. In addition, they see it as a "positive driver for Google stock given: 1) Growing scale & potential contributor to higher overall revenue growth, 2) Increasing cloud margins aiding EPS ($6bn 3-yr. est. profit contribution), and 3) Growing stock valuation contribution on ‘26 revenues ($400-500bn in potential cap. at 7-9x revs)."