Yahoo Finance Alphabet (GOOGL) Adds Generative AI-Powered Feature to Gmail
Alphabet’s GOOGL shares have rallied 33.2% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s growth of 28.7%. The company is continuously benefiting from its growing generative AI capabilities to enhance user experience.
Alphabet’s division Google recently introduced a Gemini-powered summarize feature in Gmail for Android.
This generative-AI-backed feature will be useful in summarizing long newsletters in Gmail. Users can also recap conversations in Gmail with the “Summarize this email” option.
Alphabet is expected to gain solid traction among Android users using Google Workspace on the back of this new feature.
Year-to-Date Performance
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Growing Generative AI Efforts Aid Prospects
In addition to the latest summarize feature, Google launched Gemma 2, a lightweight open model available in 9B and 27B parameter sizes, aiming to accelerate AI deployment and innovations across various enterprises.
Alphabet rolled out its generative AI-powered note-taking app, NotebookLM, which was previously available only in the United States, to Australia, Brazil, Canada, India, the U.K., and 208 more countries and territories.
NotebookLM, powered by Google's Gemini 1.5 Pro language model, aids in document understanding and reasoning. It generates summaries and suggests follow-up questions, focusing on the content of the documents.
Google also rolled out YouTube Music Gemini Extension, which enables users to search for music and play radio, among others, with the help of an AI chatbot experience.
It also enhanced Android Studio's bot with Gemini Pro, allowing developers to ask coding-related questions and seamlessly integrate generative AI features into their apps.
These efforts will enable Alphabet to capitalize on the solid growth opportunities present in the generative AI market, which, per a Statista report, is expected to hit $36.06 billion in 2024 and reach $356.10 by 2030, witnessing a CAGR of 46.5% between 2024 and 2030.
Alphabet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Advantage in the Generative AI Space
Growing generative AI capabilities boost Alphabet’s competitive position against its peers like Microsoft MSFT, Adobe ADBE and Amazon AMZN, which are also making concerted efforts to strengthen their foothold in the generative AI space.
GOOGL shares have outperformed MSFT and AMZN’s return of 23% and 30%, respectively, in the year-to-date period. ADBE shares have lost 4.4% in the same time frame.
Microsoft’s move to enhance its generative AI capabilities by integrating GPT-4 into Bing and Edge, providing a ChatGPT-like user experience, remains noteworthy.
Meanwhile, Adobe is riding on the success of its family of creative, generative AI models, Firefly. It recently integrated Firefly-powered Generative Fill, Remove Background, Erase and Crop features into Acrobat. These features are designed to allow customers to edit images directly in PDFs.
Amazon, on the other hand, is benefiting from the solid adoption of Amazon Bedrock, which offers seamless access to high-performing foundation models from AI companies through an API.
Conclusion
Alphabet’s strengthening generative AI capabilities, coupled with its strong competitive position, are acting as key drivers of its long-term growth prospects.
Moreover, the company’s robust cloud division, growing momentum across Google’s mobile search, and increasing demand for its Android, Search and YouTube offerings are other positives.
These factors are expected to continue driving the overall financial performance of the company in the near term.
The Zacks Consensus Estimate for 2024 total revenues stands at $291.26 billion, indicating year-over-year growth of 13.6%.
The consensus mark for 2024 earnings is pegged at $7.60 per share, indicating a 31.03% rise from the year-ago figure. The figure has been revised upward by 0.4% in the past 60 days.
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