KeyBanc analyst Justin Patterson reiterated a Buy rating on Alphabet Inc (GOOG  ) (GOOGL  ) with a price target of $200.

The analyst expects Google's annual developer event, Google I/O 2024, to reinforce his thesis that Alphabet has a meaningful scale and AI creates new monetization opportunities. He hopes to see Gemini incorporated across Google products.

While audio and visual recognition capabilities may receive increased scrutiny after OpenAI's Monday event, he is more focused on the Android device ecosystem.

Apple Inc (AAPL  ) and Meta Platforms Inc (META  ) have already signaled how AI is creating new opportunities in mobile and wearables (both across devices and underlying services), and Patterson would be surprised if Google were left out of the conversation.

From his perspective, an updated Google AI assistant code-named Pixie is the main item to watch for as it could open up new products and services across Android devices.

Patterson expects to see updates on Android 15, Wear OS, search generative experience (SGE), and Cloud, with the overarching theme centering on Gemini-powered services. Patterson expects to wait to hear an update on Apple licensing.

The analyst noted Alphabet as a consistent revenue growth compounder in the digital advertising space due to its breadth of properties that serve two billion+ users. Further, he said an opportunity for more value could be realized through monetizing non-advertising services such as Cloud, hardware, and the Other Bets portfolio (most notably Waymo and Verily).

Patterson projects second-quarter revenue and EPS of $83.91 billion and $1.84, respectively.

Price Action: GOOGL shares traded lower by 0.02% at $169.08 at the last check Tuesday.