Shares of Alphabet (GOOG 0.36%) (GOOGL 0.29%) were moving higher today on a bullish analyst note, and on reports that it would restructure its ad sales unit to lean more on artificial intelligence (AI).
Both of those news items helped drive the stock up 3% as of 12:35 p.m. ET.
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Alphabet leans into AI
First, the Google parent got a bullish note from Raymond James yesterday after the market closed. The research firm resumed coverage on the stock with an outperform rating and a price target of $150, noting the potential for a platform transition driven by generative AI, and also said its estimates were slightly above the consensus, as it see continued momentum in YouTube.
Today's gains seemed to be more of a direct result of the restructuring news after The Information reported the company's plans to reorganize its 30,000-person ad sales unit. The move comes as Google plans to step up its use of AI tools like machine learning that can automate and manage the ad-buying process.
Room for cost cuts
Alphabet laid off 12,000 employees at the beginning of the year, but activist investors and others have urged the company to cut costs further, and the reorganization seems likely to lead to that. Though Alphabet already has wide margins, the search monopoly sells itself and could likely be more profitable.
Expect to learn more about the reorganization in the company's next earnings report, and the move could pave the way to more profitability improvements, especially as the company leans further into AI.
