Citizens JMP Reiterates Market Outperform Rating on Alphabet Stock

Citizens JMP has reaffirmed its Market Outperform rating on Alphabet Inc., maintaining a positive stance on the Google parent company’s growth prospects. The investment firm highlighted continued momentum in artificial intelligence tools, as well as integration of new features across Google’s core products, as key drivers for future performance.

Alphabet’s stock has remained a central focus for analysts in 2025, with its share price hovering near record highs after a year marked by strong advertising results and progress in cloud services. JMP’s reiterated rating signals confidence that Alphabet can maintain its competitive position while benefiting from its expanding AI initiatives and cost optimization measures. The firm’s assessment provides investors with reassurance at a time when technology valuations remain under scrutiny across the broader market.

Background: How We Got Here

Citizens JMP has been closely tracking Alphabet’s performance over the past year, particularly its efforts to integrate artificial intelligence into search and other core services. In June 2024, the firm upgraded Alphabet from Market Perform to Market Outperform, citing the company’s rollout of AI Overviews in Google Search as a meaningful driver of user engagement and revenue potential. That move reflected growing analyst confidence in Google’s ability to adapt search to a changing competitive environment.

Later in September 2024, Citizens JMP raised its price target from 220 dollars to 225 dollars. The firm pointed to continued adoption of AI features and operational improvements as reasons for the adjustment. Around the same time, Alphabet reported steady growth in advertising revenue and cost discipline in its cloud and infrastructure business.

These updates came during a period when Alphabet faced rising regulatory pressures, particularly in the United States and the European Union, over competition and data practices. Despite such challenges, the company’s stock performed strongly throughout 2024, ending the year with a gain of more than 55 percent. This momentum created a favorable backdrop for Citizens JMP to sustain its positive outlook going into 2025.

What’s New: The Reiteration + Price Target Hike

In its latest note, Citizens JMP reiterated its Market Outperform rating on Alphabet and set a new price target of 290 dollars. The firm highlighted Alphabet’s expansion of artificial intelligence features, including the wider availability of AI Mode in multiple languages such as Spanish, as a key growth catalys. According to the analysis, these additions are expected to increase global user engagement, which could translate into stronger advertising revenue.

Another factor driving the raised target is Alphabet’s integration of its Gemini AI technology directly into the Chrome browser. Analysts at Citizens JMP noted that embedding AI tools at the browser level offers a distribution advantage, positioning Google to capture more user activity without relying solely on traditional search formats. This move reflects a broader industry trend where generative AI becomes more accessible to everyday users.

The firm also pointed to potential improvements in profitability from 2026 onward. Cost management, particularly around cloud infrastructure and corporate spending, is expected to support higher margins. Alphabet’s focus on efficiency has already been evident in recent quarterly results, where operating income grew despite ongoing investments in data centers and AI development. Citizens JMP views this balance between growth initiatives and expense control as a sign that Alphabet can sustain long-term earnings expansion.

With the stock trading near all-time highs, the new price target suggests further upside. For investors, the reiterated rating underlines steady confidence that Alphabet’s AI strategy and operational discipline will remain central drivers of shareholder value.

Upside vs Risks

Citizens JMP’s latest note underscores the growth potential of Alphabet, but analysts also recognize that the company faces notable risks. On the upside, Alphabet is well positioned to benefit from the global rollout of AI features. The addition of multilingual capabilities in AI Mode can expand Google Search usage in non-English markets, while the integration of Gemini into Chrome is expected to deepen user engagement across devices. Together, these initiatives highlight the company’s ability to use its ecosystem to support both advertising and subscription revenues.

Another advantage is Alphabet’s diversified business model. The company generates the bulk of its revenue from advertising, but Google Cloud has become a meaningful contributor as well. In the most recent quarter, Google Cloud posted revenue of 10.4 billion dollars, an increase of 28 percent from the prior year. This growth provides Alphabet with an additional buffer against fluctuations in digital ad spending.

However, Alphabet continues to face challenges. Regulatory pressure remains a major concern, with the U.S. Department of Justice pursuing an antitrust case that could affect how Google structures search distribution agreements. Any adverse rulings in the U.S. or European Union may impact its business model. In addition, heavy investment in data centers and AI infrastructure will raise costs, which could limit margin expansion if revenue growth slows. Competition from rival AI platforms also poses a risk, as users may increasingly turn to alternative services for information retrieval.

These factors create a mixed picture. While Citizens JMP highlights Alphabet’s strong position in AI and its broad ecosystem, investors must also weigh the possibility of regulatory and cost pressures reducing long-term returns.

Conclusion

Citizens JMP’s reaffirmed Market Outperform rating reflects confidence that Alphabet is positioned to sustain growth through continued investment in artificial intelligence and disciplined expense management. The new 290 dollar price target suggests that analysts see further upside beyond the company’s current valuation, even after a strong run in 2024. Alphabet’s ability to integrate AI directly into products like Search and Chrome signals long-term strategic intent that could reshape user behavior and reinforce its market dominance.

For investors, the takeaway is twofold. Alphabet’s diversified revenue streams, spanning advertising, cloud services, and AI-driven products, provide multiple levers for growth. At the same time, ongoing regulatory challenges and rising infrastructure costs remain risks that could weigh on future profitability. These competing factors mean the company’s trajectory will likely depend on how effectively it can translate AI adoption into earnings while managing external pressures.

Overall, Citizens JMP’s assessment reinforces the view that Alphabet remains one of the most influential technology companies, with strong fundamentals and opportunities for expansion. For long-term investors, the stock continues to present a compelling case, provided that regulatory developments and competitive dynamics are monitored closely.