
Alphabet will seek to reassure investors as AI rivals step up competition
(Reuters) -Alphabet, faced with unprecedented threats from AI rivals, will be keen to assure investors this week that the company's own spending on the technology is helping it dig a deeper moat around its search and advertising businesses.
Rivals of the Google parent, including AI startups such as OpenAI and Perplexity, have attracted tens of millions of users to their platforms. They are looking to break Google Chrome's dominance with their own browsers, even as a U.S. court weighs breaking up the tech company with remedies that may include a forced Chrome sale.
To maintain its grip, Alphabet has rolled out tools such as AI Overviews, which show AI-generated summaries on top of traditional links that have drawn 1.5 billion users per month, and made more Gemini models available to enterprise users. The integration of AI into Google search is key to its advertising appeal, as it offers advertisers the ability to run more effective campaigns and get bigger returns on their dollars.
In March, Google added a new AI-only mode to its search. Alphabet, scheduled to report second-quarter results on Wednesday, has also staged a coup, securing rival OpenAI as a customer for its cloud business.
"AI targeting advantages and increasing ad loads in AI Overviews could drive ad performance above traditional search," BofA Global Research analysts said.
Wall Street has been looking for returns from Big Tech's AI spending spree that is expected to total $320 billion this year.
Google reassured investors in late April with better-than-expected first-quarter earnings that were powered by AI demand.
But OpenAI and Perplexity's launch of their own browsers has intensified pressure on Google's search business, which was already under strain from AI chatbots pulling away queries.
"As those (AI) companies deploy their browsers, that'll take more searches away from Google. But the bigger threat will be when those companies have enough of a user base that they start selling advertising," said D.A. Davidson analyst Gil Luria.
"It's only when Google loses advertisers that the revenue is going to be impacted."
Also, Alphabet's Waymo, the early U.S. leader in autonomous cabs and often overlooked during earnings, is likely to draw more attention as Elon Musk's Tesla rolls out a test fleet in Austin, Texas.
** Alphabet is expected to report a near 11% jump in total revenue for the second quarter, per LSEG data.
** Analysts expect a 7.5% rise in advertising revenue and a 26.2% jump in its cloud computing segment.
** Per-share earnings are expected to be around $2.18, excluding one-off items.
** Alphabet shares are largely flat so far this year.
** Stock is among the laggards in the "Magnificent Seven" group of megacap stocks, with Nvidia leading the range with a 28% jump and Tesla at the bottom with a 19% decline.
** Alphabet is rated "buy" on average among 55 brokerages, with a median price target of $203.84.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


India.com
42 minutes ago
- India.com
Google CEO Sundar Pichai becomes billionaire, wealth increases because of his current net worth is...
Google CEO Sundar Pichai becomes billionaire, wealth increases because of his current net worth is… Sundar Pichai Becomes Billionaire: Alphabet CEO Sundar Pichai has become a billionaire after his company earned big, adding more than a trillion dollars to the market value. The tech giant has provided a whopping 120 percent return to its investors since 2023. As Alphabet's shares touch all-time high, Pichai's net worth has also increased to USD 1.1 billion, as per Bloomberg Billionaires Index. Notably, this is a one-of-a-kind achievement for a CEO who has not founded the company. Top executives in the tech world, such as Mark Zuckerberg (Meta) and Jensen Huang (Nvidia) become billionaires because of their stakes as founders in their companies. Longest Serving CEO Of Google Google was founded in 1998, and Sundar Pichai joined the tech Giant in the year 2004. Even though he was not a part of the company when it was founded, Pichai has become its longest-serving CEO. He will complete 10 years as the CEO of Google in August. Notably, the 53-year-old of Indian-origin has a stake of 0.02 percent in Google, which is worth about USD 440 million. He has sold over USD650 million worth shares of Alphabet over the past decade, and most of his wealth is in the form of cash. Sundar Pichai's Personal Life Sundar was born in Tamil Nadu's small city of Madurai in a middle-class family. He grew up in a two-room apartment. He got a phone at the age of 12. In 1993, when Pichai received a graduate scholarship to Stanford University, his family spent more than his father's annual salary (USD1,000) to buy a flight ticket to California. Long Journey At Google And Focus On AI After joining Google, Pichai worked hard for more than a decade and took the company to new heights. He helped in developing the Chrome browser and led the Android division, even before being named CEO in 2015. During an interview with Bloomberg in October last year, Pichai said that 'One of the first things I did as CEO was focus the company on AI.' It is worth noting that Google made its first big AI investment in 2014 and bought London-based startup DeepMind for USD400 million. Pichai has majorly increased spending, dedicating nearly USD50 billion to AI projects last year alone.


Time of India
42 minutes ago
- Time of India
Meta names ChatGPT co-creator Shengjia Zhao as chief scientist of Superintelligence Lab
Synopsis Zhao, a former research scientist at OpenAI, co-created ChatGPT, GPT-4 and several of OpenAI's mini models, including 4.1 and o3. He is among several researchers who have moved from OpenAI to Meta in recent weeks, part of a broader talent arms race as Zuckerberg aggressively hires from rivals to close the gap in advanced AI.
&w=3840&q=100)

Business Standard
42 minutes ago
- Business Standard
Meta appoints former OpenAI researcher to lead superintelligence AI group
Mark Zuckerberg has named Shengjia Zhao, an artificial intelligence researcher who joined Meta Platforms Inc. from OpenAI in June, as the chief scientist for the social media company's new superintelligence AI group. Zhao was part of the team behind the original version of OpenAI's popular chatbot, ChatGPT. He will help lead Meta's high-profile group, which is aiming to build new AI models that can perform tasks as well as or better than humans. Zhao will report to Alexandr Wang, the former chief executive officer of Scale AI who also joined Meta in June as Chief AI Officer. Meta has been spending aggressively to recruit AI experts to develop new models and keep pace with rivals like OpenAI and Google in the race for AI dominance. The company has been looking for a chief scientist for the group for months. Zhao is one of more than a dozen former OpenAI employees who have joined Meta's AI unit in the past two months. 'Shengjia co-founded the new lab and has been our lead scientist from day one,' Zuckerberg, Meta's CEO, wrote in a post announcing the news on Threads. 'Now that our recruiting is going well and our team is coming together, we have decided to formalize his leadership role.' Zhao was a co-author on the original ChatGPT research paper, and was also a key researcher on OpenAI's first reasoning model, o1, which has helped popularize a wave of similar so-called 'chain-of-thought' systems from labs such as DeepSeek, Google, and others. He was listed as one of over 20 'foundational researchers' on the project. Yann LeCun, another AI researcher who has been at Meta for over a decade and holds the title of chief scientist, will continue to work at the company as chief scientist of an internal AI research group known as FAIR, according to a person familiar with the matter. He will report to Wang, they added.