The Sentiment Around Google Seems Unfairly Negative Right Now

Cloud: A Bright Spot

Analyst Ross Sandler believes the company could grow through its tougher comps in the second half, as now more than half of its queries are mobile and monetization continues to ramp. The analyst noted that the Google's Cloud business is likely to benefit from rapid growth off a low base and an easy comp. Accordingly, the analyst believes 40+ percent revenue growth, well above the ad business.

3Q Revenue Upside Likely

Deutsche Bank's checks point to solid traction among some of the new Adwords features like ETAs, Customer Match, cross-device and device independent bidding. The firm sees small upside to its $15.8 billion revenue estimate and a 100 basis point improvement in core margin yet again. EPS upside if at all, according to the firm, will be driven by some rationalizing the "other bets" cost structure. The firm estimates GAAP earnings per share of $6.81.

Related Link: Samsung's AI Strategy Poses Problems For Google

Mobile Queries, Cloud, AI-ML: Triple Boost

Having crossed the 50 percent of queries in mobile, the firm believes Google will benefit from above-trendline growth at sites, excluding forex, for the next several quarters. If Cloud performs as expected in the third quarter, the firm believes the company's Google Cloud Platform would start improving and potentially be a second act on top of advertising over the coming years. Additionally, the firm believes the Street is underestimating the ability of AI and Machine Learning in driving engagement for many Google products.

$1,000 Target Not Far Fetched

Concluding, Deutsche Bank said multiple expansion is unlikely, although out-year earnings per share boost of potentially $5 to $10 due to possible reduction in losses at Other Bests could take shares up to $1,000. The firm has a Buy rating and a $1,050 price target on the shares of the company.

At last check, shares of Alphabet (GOOG) were down 0.07 percent at $785.41, while GOOGL shares were down by the same percentage, trading at $813.62.

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