Alphabet (GOOG, GOOGL) is speeding up the release of its generative AI products, with tools like AI Overviews and Lens showing stronger user growth and commercial traction, Morgan Stanley said in a note Friday.
AI Overviews now reaches 1.5 billion monthly active users, up from 1 billion last quarter, while Google Lens has seen monthly visual searches increase by 5 billion since October, the investment firm said.
Google's large language model Gemini is now embedded across all 15 of its core products with over 500 million users each, with features like AI Mode and Gemini Live drawing stronger engagement, Morgan Stanley said.
Internally, over 30% of Google's new code is now suggested by AI tools, which are also being used across functions like customer service and finance to improve efficiency and reduce costs, Morgan Stanley analysts noted.
While macroeconomic risks remain, Alphabet's tools and data help advertisers respond to changing consumer behavior, making its ad platform likely to stay resilient even in a slowdown, according to the note.
Morgan Stanley maintained an overweight rating for Alphabet with a $185 price target.
Shares of the company were up about 2% in recent trading.
Price: 164.40, Change: +2.93, Percent Change: +1.81
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