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The analysts, who maintained a Buy rating and $155 per share price target on the stock in a note Monday, said they came to the conclusion after going through key operating metrics at the company.
“For cloud, our AWS case study of cost optimization indicates that Google Cloud’s revenue growth could further decline in the foreseeable future, leading to downside vs. Street expectations,” the analysts wrote.
“For opex, we believe consensus has not fully reflected headwinds related to NFL Sunday Ticket licensing costs and potential legal expenses in 4Q23. At the same time, margin expansion for FY24 could be limited given continued investment in AI,” they added.
As a result, Mizuho believes there could be potential negative earnings revisions, although they acknowledged that the fundamentals remain intact for the company over the long-term.
