Bank of America Reaffirms Buy on Alphabet with $430 Target After AI Highlights at I/O

Bank of America reiterated its Buy rating on Alphabet, setting a $430 price target that represents about a 10.9% upside from the stock’s $387.66 level. The rating follows Google’s I/O showcase, where the company highlighted rapid growth in AI-driven products: AI Overviews now serve 2.5 billion users, AI Mode has 1 billion users, and Gemini’s monthly active users rose from 400 million to 900 million in a year. Analysts Justin Post and Nitin Bansal note that these metrics suggest Google is shifting search users toward AI‑native experiences, though they flag uncertainty over whether AI query monetisation will exceed traditional search revenue.

Despite the positive AI momentum, Alphabet’s shares fell about 2% on the day of the event. BofA projects free‑cash‑flow to dip by roughly $29 billion in 2026 as capital expenditures climb sharply, and it cautions that the financial benefits of the AI push remain to be proven. Nonetheless, the bank maintains confidence in the company’s AI positioning and ecosystem lock‑in, justifying the premium valuation.