Quiver Quantitative - Alphabet (NASDAQ:GOOGL), the parent company of Google, saw a significant surge in its stock value following the release of its latest artificial intelligence (AI) model, Gemini. The introduction of Gemini has markedly alleviated apprehensions about Alphabet’s competitive stance in the rapidly evolving AI sector.
On Thursday, Alphabet (GOOG) shares experienced a substantial upswing, marking a notable intraday gain of 6.1% since July. This rally bolstered the company's market capitalization by over $80 billion. In the context of the 2023 stock market, Alphabet's shares have outperformed, showcasing a 55% increase compared to the 46% and 53% gains of the Nasdaq 100 Index and Microsoft (NASDAQ:MSFT), respectively. Microsoft, a significant player in AI due to its investment in OpenAI, is seen as a direct competitor in this space.
Market Overview: -AI optimism has fueled 2023 gains in megacap tech stocks. -Alphabet's cloud unit, which has been attracting business from AI startups, has seen a strong performance. -Investors are closely monitoring any sign of weakness or strength in the AI landscape.
Key Points: -Analysts expressed positive sentiment regarding the Gemini release, with KeyBanc Capital Markets calling it “a flex of years of AI muscle development.” -Roth MKM expects “negative AI sentiment toward GOOGL to fade quickly leading to an uptick in its valuation multiple.” -Google is launching three versions of Gemini for various applications: -Gemini Ultra: The most powerful version, still being safety tested and reviewed. -Gemini Pro: The midline version, already leveraged for some answers in Bard. -Gemini Nano: The smallest version, intended for use on smartphones, laptops, and other local devices.
Looking Ahead: -The release of Gemini marks a significant step forward for Google in its quest to become a leader in the AI space. -The model has the potential to be used in a wide range of applications, and investors are clearly excited about its potential.
Analysts have positively responded to the Gemini release, with KeyBanc Capital Markets highlighting it as an indication of Alphabet’s sustained AI development efforts. Roth MKM anticipates a swift dissipation of negative AI sentiment towards Alphabet, potentially leading to an enhanced valuation multiple. The AI sector has become a critical factor in driving stock values, particularly among major technology and internet companies. Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), both pivotal in AI chip production, have seen their shares surge, with Nvidia more than tripling and AMD climbing over 90% this year.
Alphabet's successful launch of Gemini, comprising its most advanced AI software model to date, has been well-received by the market. The launch of three versions of Gemini, tailored for different applications, further underscores Google's commitment to leading the global AI race.
This article was originally published on Quiver Quantitative