BMO Capital Markets has reiterated its bullish stance on Alphabet Inc (NASDAQ:GOOGL), keeping the company as its Top Pick in the internet sector and maintaining an Outperform rating despite recent losses of high-profile artificial intelligence researchers.
In a research note, BMO analyst Brian Pitz emphasized Alphabet’s substantial roster of AI talent, saying the firm’s depth of expertise reduces the strategic impact of individual departures. BMO views the market reaction - a roughly 10% decline in Alphabet shares following the exits of Noam Shazeer to OpenAI and John Jumper to Anthropic - as disproportionate when compared with a 3% drop in the S&P 500 over the same span. The analyst characterized the share weakness as an attractive opportunity for investors who see long-term value in Alphabet’s search and cloud franchises.
BMO’s assessment centers on the idea that the company’s collective AI resources and institutional capabilities mitigate the effect of losing individual researchers. The firm believes market participants have overestimated how much a few departures can affect Alphabet’s overall AI roadmap and competitive positioning within the technology sector.
Other market participants have adjusted their outlook in different ways. The note references a separate move by Wells Fargo, which reduced its price target on Alphabet while maintaining an Overweight rating. Wells Fargo also projects 17% year-over-year growth in search for the second quarter, a forecast cited alongside the firm’s decision to keep a favorable rating on the stock.
Alphabet is also contending with regulatory scrutiny abroad, as the company faces an antitrust probe in South Korea focusing on its app store practices. The regulatory issue is an additional factor for investors to weigh alongside the personnel and valuation dynamics discussed by analysts.
Investor concern over talent retention has lately put pressure on shares across major technology companies, and Alphabet’s recent outflows of notable AI researchers have been part of that narrative. Nevertheless, BMO’s note expresses confidence that Alphabet’s broader talent bench and resource base are sufficient to sustain its technological edge and competitive performance.
Summary
BMO Capital Markets has reaffirmed Alphabet as its top internet pick and retained an Outperform rating, arguing that recent AI talent departures - including Noam Shazeer and John Jumper - do not materially damage the company’s AI capabilities. The firm views the approximately 10% share decline as an overreaction and a buying opportunity, while Wells Fargo has trimmed its price target but kept an Overweight rating and projects 17% year-over-year search growth in Q2. Alphabet is additionally facing a South Korean antitrust probe over its app store practices.