Google's Stock Fell on Its Best I/O in Years. Here's Why BofA Is Still Buying

▤ Summary

Bank of America reiterates a “buy” rating on Alphabet with a $430 target, arguing Google’s I/O announcements and user metrics support further upside. BofA highlights rapid adoption of AI features—AI Overviews at 2.5 billion users, AI Mode at 1 billion, and Gemini growing to 900 million monthly active users—as evidence Google is shifting users toward AI-native experiences. The note also flags near-term pain: Google’s stock fell ~2% on I/O day, and free cash flow is projected to drop sharply in 2026 as capital spending surges. BofA outlines five product tracks (models, Search, agents, commerce, and hardware), but warns monetization of AI queries, regulatory risks, and heavy capex could limit returns in the short term.

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