Alphabet (GOOGL) shares were trading at $328.09 in pre-market activity on October 22, down roughly 2% from the prior close of $334.76. The move came after Citizens JMP lowered its price target on the stock ahead of the company's third-quarter earnings report, which is scheduled for October 28. Pre-market sessions typically carry lighter trading volume than regular hours, so early quotes can shift once the opening bell rings.

Analyst Andrew Boone cut his price target on Alphabet to $450 from $515, a reduction of about 13%. His previous forecast had been the highest on Wall Street. Even at the reduced level, the new target implies upside of roughly 34% from the last close. A price target represents an analyst's expectation for where a stock will trade over a 12-month horizon. Citizens maintained its Market Outperform rating on the shares, which is equivalent to a Buy.

Why Citizens JMP Lowered Its Target

Boone pointed to intensifying competition in Search from AI agents and also flagged execution risk. The backdrop: AI assistants increasingly answer queries directly in a conversational interface rather than steering users toward external links, a shift that has become one of the most closely watched issues across digital advertising. While he described himself as "incrementally cautious" on Search, he nevertheless expects Alphabet to deliver strong results.

In his view, the stock's reaction to the earnings report will hinge more on management's commentary than on the reported numbers themselves. Investors are looking for clarity on how AI agents are affecting Search and whether Alphabet's heavy AI spending will ultimately pay off — a question that now hangs over much of the technology sector as AI infrastructure spending climbs.

By segment, Boone expects cloud results to beat estimates, supported by pricing and usage trends, while Search should land roughly in line with expectations given tough year-over-year comparisons. He views YouTube as a "wild card," noting that the advertising boost from the World Cup is fading even as U.S. midterm election ad spending picks up.

Despite the trimmed target, Boone remains constructive on the long-term setup. He cited Gemini 4 Argon, outside demand for Google Cloud, and distribution reach through Android and Chrome. He also pointed to Alphabet's leadership in Search, AI and online video, together with its stake in Waymo, arguing that the company merits a premium to the broader market — meaning investors would pay more per dollar of earnings than for the typical company.

Boone ranks No. 550 among more than 12,500 analysts tracked by TipRanks, with a 54% success rate and an average return of 12.80% per rating.

Wall Street Stays Bullish

TipRanks data shows a Strong Buy consensus on Alphabet. Over the past three months, 26 analysts rated the stock a Buy, four issued Hold ratings and none recommended a Sell. The average 12-month price target stands near $427, implying upside of roughly 28% to 33% depending on the reference price used.

The stock, however, has not matched that optimism this year. After climbing nearly 28% from January to mid-May, shares slid to 16.85% below that high. Trading steadied from early August to early October before a 5.38% drop, followed by the additional 1.99% pre-market decline on October 22.

Alphabet is scheduled to report its third-quarter results on October 28. Wall Street expects earnings per share of $3.03, an increase of 5.6% from a year earlier, on revenue of approximately $127.9 billion, which would represent growth of about 25%. Consistent with Boone's framing, the market's read may hinge as much on management's commentary about AI agents and Search — and the payoff from AI spending — as on the reported figures themselves.

Source: CoinCentral