Is Google Stock Worth Investing In Ahead of I/O, Marketing Live Events Amid AI Competition?
- Google’s parent company Alphabet (GOOGL) is in the spotlight as it navigates the opportunities and risks presented by generative artificial intelligence (AI).
- One key question is how the integration of chatbot AI technology into search queries will affect the company’s advertising revenue.
- Google’s stock has advanced 19% in 2024, and the company recently announced its first-ever dividend and a new $70 billion stock buyback.
Explore how Google is leveraging generative AI, the potential impact on its stock, and the company’s strategic moves in the tech industry.
Google Stock: Possible Catalysts
Google is expected to make AI-related announcements at its upcoming Google I/O and Google Marketing Live events. The company’s first-quarter earnings and revenue surpassed consensus estimates, and it announced a new $70 billion stock buyback. Despite increasing capital spending on AI investments, Google expects its operating margins to expand in 2024.
Generative AI Momentum?
Analysts note that Alphabet has realigned its strategic direction on AI, with a clearer pathway to monetization and cost optimization. Google’s cloud business, bolstered by AI offerings, saw a 28% increase in Q1. The company’s consolidation of various AI teams under Google DeepMind is expected to streamline operations and enhance product development efficacy.
DOJ Anti-Trust Case Ruling Looms
A ruling in the Justice Department’s antitrust trial against Google is pending. The government alleges that Google maintains an internet search monopoly through exclusionary distribution agreements. If Google loses, it could face a breakup or changes to its search engine promotion methods.
‘Other Bets’ Under New Scrutiny
Alphabet’s money-losing “Other Bets” and Moonshots are company assets that investors should monitor for new developments. Google’s Other Bets reported an operating loss of $4.1 billion last year on revenue of $1.5 billion. Alphabet is allowing Other Bets like Google Fiber to seek outside investors, potentially leading to spin-offs.
