Google parent company Alphabet (GOOGL) is holding its annual developer conference this week and plans to use the event to announce several new artificial intelligence (AI) features and enhancements.
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The I/O developer conference being held in Mountain View, California kicked off on May 20. It is immediately clear that Alphabet is using the event to justify its huge investments in AI technologies and allay worries about the future of its business, notably its lucrative online search engine.
Early reports from the conference are that there is a tone of increased urgency permeating the gathering, especially as the generative AI that Alphabet is scrambling to develop could cannibalize the company’s online search business that has long been its stronghold and accounted for most of the company’s $350 billion revenue last year.
Rising Competition
Management at Alphabet, including CEO Sundar Pichai, is using this year’s developer conference to hammer home that the company has caught up to competitors such as Microsoft (MSFT) when it comes to AI chatbots and other tools such as ChatGPT.
The company is also seeking to reassure developers, the media, and investors that its core online search business remains strong. GOOGL stock recently lost $150 billion in market value in a single day after an Apple (AAPL) executive said that AI had caused a decline in searches on Apple’s Safari web browser for the very first time.
Notably, management plans to outline the ways in which AI accounts for most of Alphabet’s $75 billion in capital expenditures this year. At the conference, Alphabet is also expected to provide updates on how AI is being used to enhance online search, as well as efforts to create a “universal AI agent.” The company is also expected to outline its AI revenue streams.
GOOGL stock has declined 12% this year.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 28 Buy and nine Hold recommendations issued in the last three months. The average GOOGL price target of $197.69 implies 18.68% upside from current levels.
