Alphabet is set to pop 15% as Google is a clear winner in AI, Wedbush says

• Alphabet stock could see a big surge as Google is a "clear winner" in AI, according to Wedbush.
• Analysts pointed to multiple advantages the Google parent has over other firms in the AI space.
• More upside could lie ahead if Alphabet expands partnerships and issues more guidance on AI projects. 

Alphabet stock is primed for a big jump, as Google will emerge as a clear winner in the artificial intelligence race that's gripped Wall Street, Wedbush analysts said in a recent note.

The firm added Alphabet stock to its "Best Ideas List" and raised its price target on the Google parent from $160 to $175 per share. That implies a 15% upside from the stock's current levels, with Alphabet trading around $152 a share on Friday morning. 

"We believe the perceived structural risks to Google Search are overstated and continue to view Alphabet as a net beneficiary of generative AI," analysts said in a note on Friday.

The new price target is largely because of Alphabet's "multifaceted" edge over other competitors in the AI race, Wedbush said, such as its wide breadth of available data to train AI models and its massive user base across its products, like Android, Search, and YouTube.

The company could also soon be collaborating with Apple to incorporate its Gemini AI into iPhones. 

Shares of the tech titan have lagged the gains of other Magnificent Seven names like Amazon and Microsoft, which are up 18% and 14%, respectively year-to-date, and the stock has underperformed the wider Nasdaq which is up by about 11% for the year. 

However, sentiment over Alphabet's AI endeavors has improved, analysts said, citing more upbeat commentary on Google in recent months. Meanwhile, Alphabet shares are still up over 6% since the start of the year. That displays some resilience in the stock, despite controversy arising in March after Gemini was known to create historically inaccurate images. 

The stock could see more upside catalysts in the future, Wedbush said, adding it was looking for the Google parent to issue more guidance on its business model for its Search Generative Experience, deeper "cost reengineering" to develop its AI projects, as well as more partnerships to develop AI models with other firms.

"We continue to view Alphabet as a secular winner within the digital advertising industry with broad exposure and durable market share of overall media spending," analysts added.

Wedbush has been bullish on Alphabet and the broader AI-fueled rally for months. AI is likely spawning a new 1995-style tech bull market, Wedbush analysts said in a previous note, predicting tech stocks could soar another 33% in 2024.