Alphabet (GOOGL) executives are telling employees to adopt artificial intelligence more quickly as the tech giant ramps up spending while looking for ways to boost productivity and cut costs. At an all-hands meeting last week, CEO Sundar Pichai and Brian Saluzzo, who leads the teams building the technical foundation for Google’s main products, stated that the “AI moment” requires accomplishing more with fewer resources. Indeed, Pichai said that after periods of heavy investment, companies often add employees, but in this case, AI is expected to increase efficiency, which suggests that Alphabet might not have to.
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This message is similar to what other tech giants have said. Indeed, Amazon (AMZN) CEO Andy Jassy told employees in June that its corporate workforce would shrink as generative AI tools replace some tasks. In addition, Microsoft (MSFT) and Shopify (SHOP) have delivered similar messages, thereby making AI usage an expectation rather than an option. As a result, Alphabet recently announced that it plans to spend $85 billion on capital expenditures in 2025, up from earlier estimates of $75 billion, in order to build out data centers for AI workloads.
At the meeting, Saluzzo described the new AI tools that Google is deploying internally to speed up software development. These include AI Savvy Google, which is a learning hub with courses and toolkits, and Cider, an AI coding assistant. Google is also partnering with DeepMind to train employees on “Building with Gemini” and recently acquired startup Windsurf in a $2.4 billion deal. Pichai said that the Windsurf team will play a significant role in improving Google’s AI coding plans.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GOOGL stock based on 26 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $214.42 per share implies 8.9% upside potential.
