BMO Capital Markets kept its Outperform rating and Top Pick status on Alphabet after the company unveiled Gemini Agent, an enterprise AI agent. The analysts say the launch helps offset fears that Alphabet is losing its edge in the AI race.
BMO Capital Markets reiterated an Outperform rating and Top Pick status on Alphabet after the company unveiled Gemini Agent. The unified enterprise AI agent puts Alphabet in direct competition with Meta's Muse and OpenAI's Dots.
BMO analysts believe Alphabet is well-positioned to scale AI agents across the enterprise. They point to connections to workflows including Microsoft Office, Salesforce and ServiceNow, plus direct integrations into Google's own product suite.
About 80% of Google Cloud customers already use Google's AI products, and around 500 enterprise customers each processed over 1 trillion tokens in the past year.
The analysts also highlighted a 98% drop in cost per token since 2024, even as AI-related revenue has soared on rising enterprise volumes. BMO said those volumes are still in the early innings.
BMO expects cost-to-serve AI to keep declining as infrastructure scales, hardware improves and optimizations occur across the AI stack. However, expert calls suggest token prices may bottom around 2030, after which closed-source model providers may seek to raise prices.
According to BMO, Alphabet "remains a clear leader across the AI stack", and the analysts argue that full-stack ownership lets it benefit from optimizations at every layer as AI scales.
Source: Investing.com
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