The Rise of Alphabet’s Shares
Alphabet’s GOOGL shares have thrived, surging 33.2% since the beginning of the year. This impressive growth surpasses the Zacks Computer & Technology sector which achieved a 28.7% increase in the same period. Alphabet’s success is closely tied to the strategic utilization of generative AI technologies, reinforcing its commitment to an exceptional user experience.
Recently, Alphabet’s subsidiary Google unveiled an innovative feature powered by Gemini in Gmail for Android, designed to summarize lengthy newsletters efficiently. Users can now utilize the “Summarize this email” option to get a condensed version of their conversations in Gmail.
Performance Highlights in 2024
Meanwhile, Google continues to push the boundaries with the launch of Gemma 2, a lightweight open model focusing on AI deployment across various enterprises. The expansion of generative AI capabilities is exemplified by the global release of NotebookLM, an application powered by Google’s Gemini 1.5 Pro language model. This tool enhances document understanding and reasoning, offering summaries and suggestions for follow-up questions.
Moreover, Alphabet’s foray into music with the YouTube Music Gemini Extension and the integration of Gemini Pro into Android Studio have further solidified its position in the generative AI domain.
Competing in the Generative AI Landscape
Alphabet’s strides in generative AI underscore its competitive edge against major players like Microsoft, Adobe, and Amazon. While GOOGL has outperformed Microsoft and Amazon with respective returns of 23% and 30%, Adobe has faced a 4.4% decline in the same period.
Microsoft’s efforts to enhance generative AI through GPT-4 integration and Adobe’s integration of Firefly-powered features in Acrobat demonstrate the intensifying competition in this space. Amazon’s success with Amazon Bedrock further highlights the dynamic nature of generative AI technologies.
Future Growth Outlook
Alphabet’s robust generative AI capabilities, coupled with its competitive positioning, serve as pillars for sustained long-term growth. The company’s cloud division, combined with the popularity of Google’s mobile search and Android offerings, are key drivers of its financial performance.
Analysts project a positive trajectory for Alphabet, with a Zacks Consensus Estimate placing total revenues at $291.26 billion in 2024, reflecting a 13.6% increase year-over-year. Earnings for the same period are estimated at $7.60 per share, showing a substantial 31.03% rise from the previous year.
