Citigroup: Advertising business may be impacted by tariffs, lowers Alphabet (GOOGL.US) target price to $195.

Alphabet Inc. hosted the Alphabet Inc. Class C Cloud Next Conference on Wednesday. Citigroup lowered the company's target price from $229 to $195 after 2025, but maintained a "buy" rating. Citigroup analyst Ronald Josey and his team stated that they maintained a buy rating but lowered the target price due to limited visibility in the broader online advertising space, partly due to tariffs. Josey and other Citigroup analysts expressed increasingly positive views on Alphabet Inc. Class C Cloud Platform (GCP) due to the company's continued progress in artificial intelligence tools (led by the Gemini 2.5 series models), agent products (announcing over 10 new agents), and infrastructure upgrades (such as the seventh-generation Tensor Processing Unit chips). Analysts noted that despite macro challenges, discussions around the benefits/savings of artificial intelligence and seat brought a more positive tone among attendees, which was also surprising to them. However, Josey and his team stated that they maintained a buy rating but lowered the target price due to limited visibility in the broader online advertising space, partly due to tariffs. Analysts highlighted that they still believe in the halo of Alphabet Inc. Class C's products and the new search experience of AI models can drive search usage and relatively stable revenue growth. Analysts also look forward to the annual developer conference Google I/O on May 20 to gain a deeper understanding of Alphabet Inc. Class C's artificial intelligence products. On Wednesday, the company unveiled new Gemini models, Gemini 2.5 Flash, and other product updates at the conference. CEO Sundar Pichai also reiterated the company's commitment to invest about $75 billion in building data center infrastructure.