Canada-based investment bank BMO Capital cut its price target on GOOG recently to $200 from $230 but kept an Outperform rating on the shares.

BMO sees multiple, positive catalysts for GOOG.

The Negative Aspects of BMO's Report

BMO cut its estimates for GOOG's search revenue and reduced its overall sales estimates for the company. That's because the investment bank believes that the outlook of the overall ad market is uncertain. Additionally, the investment bank noted that the core search Click-Through Rates (CTRs) for some of GOOG's ad campaigns had fallen by more than 10%.

The Positive Catalysts Cited by BMO

According to BMO Capital, investors are undervaluing the company's launch of AI Overview Ads. These ads reportedly have higher CTRs than GOOG's traditional search ads. Further, Google Cloud Platform’s customers should be relatively resilient to macroeconomic risks in the near-term, BMO believes.

Finally, YouTube's Direct Response (DR) advertising offerings have generated positive returns for the website's customers, according to BMO Capital.

The Recent Price Action of GOOG Stock

In the last month, the stock has fallen 7%, while the shares have tumbled 21% in the last three months.

While we acknowledge the potential of GOOG, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.