Google-parent Alphabet stock surges 5% post Gemini AI model launch, but sinks after demo video proven fake

It has been only a few days since the introduction of Gemini – Google’s new AI model – and already, the newest addition to the AI landscape has started to make waves. In a matter of days since its launch, Gemini propelled the shares of Alphabet – Google’s parent company – by about 5% on Thursday. But then the same model led to the company’s shares tanking the very next day, thanks to reports that their best Hands-On video was actually a fake.

Till yesterday, the substantial surge in its stock value (as mentioned earlier, it denotes a significant leap of 5.3%) marks the most substantial one-day percentage gain since July. Gemini has been hailed as a strategic move to reestablish Alphabet’s dominance in the evolving AI landscape, and the surge, injecting over $87 billion into Alphabet’s market capitalization, symbolizes a crucial moment for the tech giant. Alphabet’s shares are currently priced at $136.93. Overall, the company’s shares have climbed by 55% this year.

Gemini, which Google projected as a strong competitor to OpenAI’s GPT, is set to come to Bard (Google’s own answer to OpenAI’s ChatGPT), as well as the Pixel 8 smartphones and other products across Google’s services, such as Chrome, Search, Ads, and more. The AI model is initially being rolled out to 170 countries, and comes in three tiers. The Ultra version is set to be the most powerful version of the trio and challenge GPT-4, and will not be released publicly until early 2024. The other two tiers of Gemini are the Pro, and Nano versions (the latter is built to run on mobile devices).

The introduction of Gemini positions Alphabet to compete effectively with industry stalwarts, including OpenAI, Microsoft, and Meta. Analysts highlight Gemini’s competitive edge, noting its superior performance compared to OpenAI’s GPT-3.5 chatbot. However, lingering questions persist regarding its comparison to OpenAI’s latest model, GPT-4 Turbo, and the long-term monetization strategy that Alphabet intends to adopt. In a nutshell, though, industry analysts view the Gemini release with resounding positivity, characterizing it as “a flex of years of AI muscle development.” “We think Google has strong AI capabilities, and data suggesting that Google has best in class, proprietary, AI capabilities can be positive for the shares in 1H′24,” analysts at Bank of America commented, adding that Alphabet has already been under pressure regarding concerns over Google’s AI capabilities.

Read more at thetechportal.com

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