Alphabet Inc. (GOOGL) has been one of the most-watched stocks by investors over the last several weeks, with some experts betting high on the asset. The Magnificent Seven stock has continued to prove its value, posting a five-year net income growth of more than 20% and thriving this year. The asset is one of the strongest-performing assets in the US tech industry, competing with rivals Meta. However, amid worries over generative AI, the stock has tumbled 11% in the last three months, leading to a troublesome Q3.
Despite the fall in price per share, GOOGL still expects to have a productive Q3 earnings report. The report could pump the stock’s price as Q4 is underway. Alphabet stock has turned in good and bad years recently. Shares jumped 65% in 2021 but in 2022 dropped 39%. Despite mounting competition in AI and internet search, Alphabet advanced 58% in 2023. The company is hoping to ride the current AI wave into positive earnings and developments over the coming months.
How Is The AI Industry Affecting Alphabet (GOOGL)?
In terms of how GOOGL has performed in the AI industry so far, the Alphabet search platform has taken a hit. At the 2024 Quality-Growth Conference earlier this month, Stephen Yiu of Blue Whale Capital explained that generative AI will significantly change Alphabet’s business model, which could interrupt gains.
Also Read: Intel: Can Q3 Earnings Reverse 55% INTC Drop?
Yiu shares a negative view of GOOGL due to signs of a market share decline from Google Search, which once held a 90% share. Furthermore, Alphabet’s AI model, Gemini, has failed to exceed performance expectations since its latest update. Some experts may see this as a “buy the dip” opportunity for shares. However, Those instances require intense research on a product’s potential upside before making rash decisions. At $200.29, the average Alphabet stock price target implies an upside potential of 21.85%, according to TipRanks, with a Moderate Buy consensus rating.
The biggest overhang of Alphabet stock remains whether the emergence of generative artificial intelligence will be materially damaging to Google’s core internet search business. Based on Q3 stock performances, investors favor the AI sector over the tech industry.