RBC Capital reiterated a Buy rating on Alphabet Inc. and set a price target of $375 on January 14. This followed an earlier move by BofA, which lifted its price target on the stock to $370 from $335 on January 13 while maintaining a Buy rating.
The rating updates came after Alphabet and Apple announced a multi-year collaboration. In a joint statement released on January 12, Apple stated that the next generation of Apple Foundation Models would be based on Google's Gemini models and cloud technology. Apple said it believes Google's AI technology provides "the most capable foundation" for its models.
Apple added that other future Apple Intelligence Features would also be powered by Google's models, including a more personalized Siri set to launch this year. A Reuters report released the same day noted the latest agreement sets Google as the default search engine on Apple's devices.
BofA also cited a separate partnership between Google and Walmart, announced on Sunday at NRF. That deal aims to bring Walmart inventory to the Gemini app by employing Google's Universal Shopping Protocol.
According to BofA, the Apple and Walmart deals warrant a higher multiple for Alphabet. The bank said the partnerships provide stronger evidence of traction for Google's Gemini capabilities.
Alphabet Inc. is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products such as Android, Google Maps, Google Play, Chrome, Search, and YouTube.