Alphabet Rallies As AI Event Showcases Massive Opportunity
Alphabet (GOOGL:US) shares have extended gains on Thursday after the tech behemoth said on Wednesday that it is in the process of incorporating more artificial intelligence (AI) for its flagship Search product.
GOOGL initially rose around 4% on Wednesday as investors weighed in positively on the updates shared during the annual I/O conference.
"We are reimagining all of our core products, including search," Sundar Pichai, Alphabet's CEO, said at the event.
The stock then added a further above 5% on Thursday as analysts were positive about the speed with which Google was incorporating AI into its products and services.
"We came away increasingly constructive on Alphabet's long-term strategic positioning in a number of key end markets and continue to see the company as the leading collection of AI/machine learning-driven businesses in our coverage universe," Goldman Sachs analyst wrote in a note to clients.
The generative AI products are being integrated into the core Search product, as well as into Gmail and Google Photos.
Alphabet was forced to expedite its process of rolling out generative AI after Microsoft (MSFT:US) teamed up with ChatGPT-developer OpenAI. Generative AI technology has been incorporated into Microsoft’s Bing search to help users draft contracts, educational papers, travel itineraries, etc.
Overall, Alphabet shares are up nearly 32% year-to-date.
The surge in GOOGL shares comes after several Congress members were selling the stock in recent months. Most notably, Representatives Ro Khanna and Michael McCaul both reported higher-than-usual sales of GOOGL shares in March and April.
Compared to this period, the GOOGL stock now trades about 10% higher.
