Alphabet Is 'Best Positioned' as AI Agents Pose Risks to Search -- Barrons.com

By Angela Palumbo

While the rise of AI agents could be a problem for Alphabet's traditional search business, the company stands to do well in the new market, according to Stifel.

Analyst Mark Kelley wrote in a research note on Thursday that he views Alphabet as "best positioned in the AI Agent arena, with its Gemini Advanced product capable of handling queries in a conversational manner, the ability to maintain a history of conversations, and given the household nature of the Google brand is likely to have the information and tools necessary to transact on a consumer's behalf."

Agents are artificial-intelligence entities that can help users perform tasks in real time. If users rely on agents to complete search tasks in the future, that could pose a risk to Google, which has been the king of search for years.

"We imagine the overwhelming majority of people paying for an AI Agent subscription are likely to avoid conducting 'traditional' searches," Kelley wrote, adding that "said another way, we envision subscriptions will offer some relief to traditional search providers (namely Google)."

Kelley rates Alphabet as a Buy with a target of $225 for the price. He added that he expects AI agents to be more prevalent in the years to come, specifically through chatbots.

In December, Alphabet unveiled work it had done on agents. This included Project Mariner, which can help users complete tasks on their computer in real time. There is also Jules, a coding agent, which is meant to help coders handle bug fixes and other tasks in real time.

While there is still a waitlist for Project Mariner and Jules, Google Cloud offers the Vertex AI Agent Builder. It is meant to be used to create AI agents and applications.

Shares of Alphabet were down 0.6% Thursday to $162.87. The stock has dropped 14% this year.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 20, 2025 13:24 ET (17:24 GMT)

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