One of the best-performing stocks in today’s market is biotech company Ginkgo Bioworks (NYSE:DNA). Shares of DNA stock rocketed more than 20% higher in early afternoon trading. The company announced a collaboration with Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud around artificial intelligence (AI)-based large language models aimed at genomics, protein function and synthetic biology.
According to the press release put forward by Ginkgo, this strategic five-year cloud and AI partnership is “intended to enable Ginkgo to develop and deploy AI tools for biology and biosecurity. Under the strategic partnership, Ginkgo will work to develop new, state-of-the-art large language models (LLMs) running on Google Cloud’s Vertex AI platform across genomics, protein function, and synthetic biology, helping Ginkgo’s customers accelerate innovation and discovery in fields as diverse as drug discovery, agriculture, industrial manufacturing, and biosecurity.”
Let’s dive into what this announcement means for investors moving forward.
DNA Stock Surges on Key AI Announcement
We’re still in the early days of AI development. Many companies are seeing significant growth upside out of the gate with key partnerships. In many respects, Ginkgo’s partnership with Alphabet is one that investors are probably correct in assuming will have some impact on the company’s bottom line moving forward. If such a large language model can accelerate innovation and drug discovery for the company’s clientele, there’s going to be some money to be made. Investors clearly want to capitalize on this before Ginkgo’s earnings take off.
Now, any sort of AI-related announcement should still be taken with a grain of salt by most investors. Certainly, Ginkgo’s key partner is illustrious, and should be treated as such. However, the timeline for the rollout of this future large language model, and its ultimate impact for the end user, remains to be seen. There are plenty of unknowns investors need to consider when determining how much value should be assigned to such projects.
The fact that this announcement today boosting Ginkgo’s market capitalization by more than 20% is significant. I’m going to see how the dust settles with this stock before giving my verdict.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
