Stay invested in Google parent Alphabet long term, analyst says

Reason for optimism in Google: Pro

Alphabet's earnings impressed Thursday, beating the Street's estimates and showing marginal growth in nearly every area — a good reason to stay invested in Google's parent long term, Piper Jaffray analyst Gene Munster said Friday.

He told CNBC that with Alphabet's focus on competing in the machine learning and artificial intelligence spaces, Google usage will spike once those functions are developed.

"I think that there's reason for optimism beyond just the near term on Google," Munster said on "Squawk Box."

Alphabet reported third-quarter earnings that topped estimates, thanks to strong results in its search, YouTube and Google Cloud segments.

Earnings per share for Google's parent company came in at $9.06, adjusted, on revenue of $22.45 billion.

The tech giant was expected to report profit per share of $8.63 on revenue of $22.05 billion, according to a Thomson Reuters consensus estimate.

Pro: Google needs to make these two major cultural shifts

The company also announced a more than $7 billion buyback of Class C shares of its stock.

Munster said that the money used for the stock buyback may be better spent as an investment in Alphabet's automotive segment.

James Cakmak, equity analyst at Monness, Crespi, Hardt & Co., said Friday that Google needs "two major cultural shifts."

"If they go into hardware, they need to be able to spend tons of money and have a high-tolerance threshold for marketing spend and building out that distribution network for the Pixel," Cakmak told "Squawk Box" in a separate interview.

Second, Google must implement what Cakmak called an "enterprise-centric cloud strategy" that would provide better, more in-touch services to consumers.