BofA Maintains Buy on Alphabet with $430 Target Despite 2% I/O Day Decline

According to BofA analysts Justin Post and Nitin Bansal, on May 20 the bank maintained a "buy" rating on Alphabet with a $430 price target, representing 10.9% upside from $387.66. The analysts cited strong user growth metrics disclosed at Google's I/O: AI Overviews now has 2.5 billion users, AI Mode reached 1 billion users, and Gemini's monthly active users grew from 400 million to 900 million year-over-year.

The report flagged that free cash flow is projected to drop approximately $29 billion in 2026 to $44.1 billion as capital expenditure surges to $186.6 billion. BofA noted that whether monetization of AI queries will "materially exceed" traditional search remains an open question, though the analyst team views the user ramp as evidence of successful transition toward AI-native experiences.