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Alphabet’s AI Search Success Sparks Rally across Adtech Stock Sector

AdTech

Business Honor
28 April, 2025

Alphabet’s AI-driven growth boosts shares, fueling optimism for broader adtech industry earnings momentum.

Following the tech giant's outstanding quarterly profits which were fueled in part by the success of its AI-powered features in Google Search, shares of Alphabet, Google's parent company, rose more than 4% on Friday. The Stocks of other important adtech companies, including Meta Platforms, Pinterest, Snap and App Lovin also saw increases as a result of the momentum.

The rise in usage of Alphabet's AI Overviews feature which was incorporated into Google Search and currently has 1.5 billion monthly users less than a year after the introduction was a major factor in the company's success. This is a key component in increasing search-related revenue, which is a fundamental aspect of Google's advertising business, according to CEO Sundar Pichai.

The positive earnings and AI traction encouraged several analysts, including those from Citi, Wedbush, and Bank of America, to raise their price targets for Alphabet. Wall Street may still be underestimating the potential revenue from AI-enhanced ad goods, especially in search and cloud services, according to analysts.

Alphabet's outstanding achievement has raised spirits in the larger adtech industry. Investors are closely observing whether similar AI-driven growth trends appear in the digital advertising businesses of firms like Snap, Meta, Microsoft, Amazon, AppLovin and Pinterest as they prepare to report results over the next two weeks. The adtech industry is changing as a result of this surge of AI invention, suggesting that intelligent, responsive automation rather than simply data may drive the next stage of advertising.