There’s no denying it. Google and YouTube parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) didn’t have a blockbuster success with the company’s artificial intelligence chatbot, Bard. However, that’s ancient history now, and it doesn’t affect our GOOG stock analysis in 2024. Alphabet has a new generative AI chatbot in the works, and it’s generating a whole lot of buzz.
Sure, there’s also buzz circulating about a rival AI company’s search engine, which could threaten Alphabet’s Google. Yet, that’s not a sufficient reason to panic-sell Alphabet stock and we’re still assigning it a confident “A” grade today.
GOOG Stock Falls on Search-Engine Rival Jitters
According to a Bloomberg report, Alphabet stock fell “as much as 3.8%” in a single day on the news that ChatGPT developer OpenAI is creating a search engine to compete directly with Google. So, does this mean that Alphabet is about to lose its crown as the search-engine king?
Baird analyst Colin Sebastian doesn’t seem to think so. In his estimation, OpenAI’s risk to Google in the search-engine arena is “modest”:
“Search is extremely challenging to get right — and Google has fended off many competitors over the years with the quality of search results… Alternative search engines probably need to be better than Google to really shift user behavior, which could be a challenge even for OpenAI.”
There have been other U.S. search-engine rivals over the years, but Google has easily fended them off. In January of this year, In January, Google controlled a whopping 91.46% of the search-engine market.
Thus, for the time being, it’s safe to conclude that Alphabet’s status as a search-engine dominator is secure despite OpenAI’s potential threat.
Say Good-Bye to Bard and Hello to Gemini
As we mentioned earlier, Alphabet’s Bard chatbot wasn’t a huge success. Yet, that was just the first chapter of a much longer story. Alphabet’s gen-AI chatbot is now rebranded as Gemini, and it’s already available on Android and iPhone devices.
We’re already catching wind of the growing buzz surrounding the Gemini rollout. This could prove to be a significant revenue generator for Alphabet. According to Reuters, “U.S. customers can subscribe for $19.99 a month to access Gemini Advanced, which includes a more powerful Ultra 1.0 AI model.”
TechCrunch, in influential technology-field publication, recently published an in-depth piece about Gemini. Apparently, the “Gemini models are multimodal,” meaning that they can, in theory, perform a range of tasks “from transcribing speech to captioning images and videos to generating artwork.”
It remains to be seen whether Gemini Advanced will be a popular subscription-based product for Alphabet. At the very least, Gemini is already capturing the attention of the media, including TechCrunch as well as Fortune.
GOOG Stock Analysis: Prepare for a $2 Trillion Market Cap
Alphabet stock wobbled because some traders were worried about ChatGPT’s threat to Google. Yet, it’s safe to say that Google remains the undefeated heavyweight champion of the U.S. search-engine market. Meanwhile, Gemini could prove to be a major force in the gen-AI field.
What can investors expect, then? All things considered, it shouldn’t be surprising if Alphabet’s market capitalization breaks above $2 trillion in the coming quarters. It might even happen in the next few weeks. So, our GOOG stock analysis is firmly bullish and we’re assigning the stock an “A” grade today.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
