When a device shows up as the plot point of a South Park episode, it becomes easy to wonder if, perhaps, it has hit its peak. New reports suggest that the improvements for online retail giant Amazon (AMZN)’s Alexa platform are not what they are cracked up to be. The news left investors modestly concerned, as they sent shares ticking down fractionally in Wednesday afternoon’s trading.
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A report from one user noted that they had been on the “Alexa train” pretty much since it came out, using it as a hub for several smart home applications like turning lights on and off and adjusting the thermostat. But that same user noted that Alexa’s improvements over the years have been more conceptual than actual, to the point where said report called Alexa “…a glorified timer for most people.”
Worse, the report noted, Alexa’s recent upgrades are not exactly the stuff of legends. The report noted that Alexa frequently did not “…have an answer for that.” So frequently that the report in question would turn to a smartphone to find answers instead. The report hoped that Alexa+ would be the end of it “..acting like that stubborn parent who clearly needs hearing aids but insists that they can hear just fine,” but discovered it was anything but. In fact, at one point, when Alexa was asked a question about the weather, it responded not with humidity figures or a short-term outlook…but a song by artist Pitbull.
The Dustbin of AI History
And that, in turn, led to a distressing report from Gartner, which noted that 40% of “agentic AI” programs– a lot like Alexa—would ultimately be scrapped within the next three years. By 2027, Gartner asserts, 40% of those systems would be pulled and sunk.
The reason? A combination of rising costs and uncertain value, as cracks start to appear and the notion of artificial intelligence (AI) tools that go most anywhere and do most anything buckles. In fact, the Gartner study revealed, there are thousands of agentic AI vendors out there right now. But only about 130 of them are likely real.
Is Amazon a Good Long-Term Investment?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 47 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 9.9% rally in its share price over the past year, the average AMZN price target of $243 per share implies 14.42% upside potential.
