Investing.com -- BMO Capital Markets reiterated an Outperform rating and Top Pick status on a tech giant after it launched an enterprise AI agent, entering what the broker calls "the next frontier of the AI war."

Alphabet this week unveiled Gemini Agent, a unified agent for enterprise work that runs in the cloud and can be accessed across devices. The launch builds on the recent release of Gemini 4 Argo and puts Alphabet in competition with Meta’s Muse and OpenAI’s Dots.

BMO analysts believe Alphabet is "well-positioned to scale AI agents across the enterprise," given initial connections to critical enterprise workflows, including Microsoft Office, Salesforce and ServiceNow, and direct integrations into its own product suite.

The analysts said AI adoption across Google Cloud customers is already broad. About 80% of customers use Google’s AI products, and about 500 enterprise customers each processed over 1 trillion tokens in the past year. Ulta Beauty built an AI shopping assistant with Gemini Enterprise, which has led to a threefold increase in sales conversion.

Management also highlighted a 98% drop in cost per token since 2024, even as AI-related revenue has soared on rising enterprise volumes that BMO says are still in the early innings.

"We also expect cost-to-serve AI to continue declining meaningfully as infrastructure scales, hardware improves, and optimizations occur across the entire AI stack," the analysts said. They said their recent expert call suggested token prices may bottom around 2030, after which closed-source model providers may seek to raise prices.

Alphabet "remains a clear leader across the AI stack," BMO stressed, arguing that full-stack ownership will let it benefit from optimizations at every layer as AI scales. The Gemini 4 Argo and agent announcements help offset fears that Alphabet is losing its edge in the AI race, the analysts said.

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