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Google’s Shares Surge 5% with Launch of New AI Model Gemini

2023.12.08

 

Key Takeaways

  • Google’s stock jumps 5% after unveiling its AI model Gemini, challenging major players like OpenAI and Microsoft.
  • The launch of Gemini raises questions about Google’s long-term AI monetization strategies.

Google’s AI Leap Spurs Stock Surge

Shares of Google saw a remarkable 5% increase on Thursday, marking the tech giant’s most significant stock surge since August 29. This leap comes in the wake of the company’s announcement of its advanced artificial intelligence model, Gemini. The new model is set to rival the likes of OpenAI, Microsoft, and Meta in the AI space, generating positive sentiments among investors and analysts.

Wall Street Reacts to Google’s AI Advancement

The introduction of Gemini has prompted a wave of optimism from Wall Street, as evidenced by the upbeat responses from various analysts. Wells Fargo’s trading desk highlighted the model’s potential to quell doubts about Google’s AI prowess. Bank of America analysts underscored that Google’s strong AI capabilities, particularly with a competitive model like Gemini, could enhance both consumer search activity and Cloud enterprise sales.

Monetization Prospects and Market Dynamics

Despite the excitement, there’s a prevailing question about how Google plans to monetize Gemini. Initially, Google intends to license Gemini through Google Cloud, starting this month. Analysts are closely watching how this will unfold, considering the revenue opportunities demonstrated by Microsoft’s recent AI advancements in its Office suite with Copilot.

Industry Analysts Weigh In

JPMorgan analysts have expressed optimism about Google’s progress in AI technology, though they anticipate some resistance due to uncertainties around the monetization path in Search. Similarly, KeyBanc analysts view Gemini as a culmination of Google’s AI efforts this year, emphasizing that tangible impacts on growth and profitability might take time to materialize. They advise patience in assessing the immediate impact on Google’s financial estimates.

 


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