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Globe and Mail
6 hours ago
- Business
- Globe and Mail
My 2 Top Quantum Computing Stocks to Buy Now
Key Points Much like artificial intelligence (AI), quantum computing has attracted investors for its game-changing potential. Quantum computing is in its early days of growth, making now a great time to look for future winners. 10 stocks we like better than Alphabet › Quantum computing has been turning heads in the investment world, much like artificial intelligence (AI) has done and continues to do. The reason? Both of these areas could be game changing for businesses and our daily lives -- for example, these technologies could result in the development of life-saving drugs, may streamline factory operations, and help you organize your daily tasks. All of this may result in supercharged earnings growth for the companies leading the way. AI and quantum computing are complementary but different: AI involves the training of large language models (LLMs) so that they can go on to solve complex problems. Quantum computing harnesses the behavior of subatomic particles -- and their ability to scale exponentially -- to solve problems that are impossible for classical computers to handle. Both technologies are in their early days of growth, though AI already is being applied to real-world problems and generating major revenue for companies -- quantum computing may take several years before becoming generally useful, some experts have predicted. But the fact that quantum is just getting started is great news for investors because it offers us plenty of time to get in on these stocks and benefit from their full growth story. And at the same time, you can minimize risk by investing in companies that already have proven themselves in other areas and are profitable. With this in mind, here are my top two quantum computing stocks to buy now. 1. Alphabet Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) is mainly known for its Google platform -- from the world's most popular search engine Google Search to cloud computing unit Google Cloud. Together, these businesses have helped the company generate billions of dollars in revenue over the years. And what's also compelling is that Alphabet has understood how to invest in its business, resulting in gains in return on invested capital too. GOOG Revenue (Annual) data by YCharts This company continues to excel in its markets and has invested in AI -- applying the technology to its business and selling AI tools to others. On top of this, Alphabet aims to win in quantum computing as well, and might be on the right track to do so. Late last year, the company announced Willow, its quantum chip that already has accomplished two big things. It's shown that it can reduce errors when scaling up with more qubits, or the particles that process data -- this is a big deal, since errors have been a big problem with quantum systems. And second, it performed a computation in a few minutes that would have been impossible for even the most sophisticated supercomputer. Alphabet says the Willow generation of chips may help quantum computing become generally useful -- reaching a huge milestone. Considering Alphabet's solid, profitable business and progress in quantum computing, it's a no-brainer buy at the dirt cheap price of 18x forward earnings estimates. 2. Nvidia You may think mainly of AI when you think of Nvidia (NASDAQ: NVDA) -- and that's right. The company dominates the AI chip market and sells a full portfolio of related elements that have been driving enormous revenue growth. In the latest fiscal year, Nvidia's revenue surged 114% to $130 billion, a record, thanks to this focus on AI. But Nvidia also may benefit from the quantum computing market too -- and it may not have to wait very long. This is because Nvidia's computing platforms can be used now to help tackle problems facing quantum computing, such as error correction, and help develop hybrid AI/quantum systems. To get the ball rolling, Nvidia recently announced it's building an accelerated quantum computing research center in Boston, to open later this year. All this means that Nvidia, which has been flying high thanks to soaring AI-driven revenue, also may see itself generating growth as quantum computing develops, and then if and when it reaches the general use stage. Meanwhile, as an investor, you don't face significant risk, since Nvidia already is highly profitable thanks to its AI business and also generates revenue by selling its chips to gaming, robotics, and professional visualization customers. So, by investing in Nvidia, you're betting on an established company that's delivered big results -- and at the same time, you're positioning yourself for a potential quantum computing win too. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
Yahoo
16 hours ago
- Business
- Yahoo
Nvidia, Microsoft, or Alphabet: Which AI Stock Giant Holds the Highest Upside? Analysts Weigh In
Generative AI exploded onto the scene at the end of 2022, and forever changed our perception – and use – of AI technology. From a predictive model, based on classification and automation, AI shifted to a more creative mode, capable of closely mimicking human expressions. The boom in generative AI has brought diffusion models and large language models (LLMs) into our consciousness, and pushed chip makers, data centers, and data analytics into the limelight. Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Given this rapid evolution, it's no surprise that the market for generative AI is expanding at a breakneck pace. According to Markets and Markets, the spend on genAI is estimated at $71.36 billion this year, with projections reaching as high as $890 billion by 2032, implying a staggering CAGR of 43.4%. Yet, while the growth story is compelling, it's important to recognize that many AI stocks have already soared, meaning much of the 'easy' upside has likely been captured. For investors eyeing the sector today, the challenge isn't simply finding exposure, but rather identifying which opportunities – if any – still offer some room for gains, rather than piling into names that have already run up sharply. This brings the focus to three tech titans that have dominated both the AI conversation and investor interest. Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) – each a Magnificent 7 megacap and a recognized leader in AI – provide distinct avenues for those hoping to ride the next leg of the generative AI wave. But with valuations stretched for many top performers, which of these giants presents the most attractive upside from here? Let's find out. Nvidia First up is Nvidia, a tech company that is a giant in all ways. Nvidia is a leader in the semiconductor field, and its GPU chips, originally designed for high-end computer gaming, have been essential in the enabling hardware for AI and its related applications. The company has been singularly successful in recent years, and its top-end AI-capable chipsets are in high demand. Strong sales have pushed Nvidia to the top of the heap, not just as the largest chip maker on Wall Street, but as the largest company of any sort: Nvidia currently boasts a market cap of $3.97 trillion, having recently been the first company to ever cross the $4 trillion threshold. That is not to say that Nvidia hasn't faced challenges and headwinds on its rise to the top. President Trump's trade and tariff policies have put a crimp on technology exports to China, and on collaborations with Chinese companies – and Nvidia, as the world's leading semiconductor maker, was deeply exposed to the Chinese market. Trade talks between the US and China are ongoing, but that did not change the fact that Nvidia was told by Uncle Sam that it will require a license to export its H20 chip products to China. This was no mean issue; Nvidia was forced to record a $4.5 billion charge during its fiscal 1Q26 related to diminished H20 sales. The China headwind hasn't stopped Nvidia from profiting elsewhere on the global scene. In June, the company announced that its Grace Hopper platform was instrumental to the operation of the JUPITER supercomputer, the fastest such computer in Europe. JUPITER is capable of providing faster simulation and training for the largest AI models, of the type used in such fields as quantum research, structural biology, and computational engineering, and is quickly becoming a leading force behind European business and scientific innovation. Also in June, Nvidia announced that it is building the world's first industrial AI cloud system, to support European manufacturers. The project revolved around a German-based AI factory that will feature up to 10,000 GPUs, with Nvidia's DGX B200 and RTS PRO Servers heavily featured. The industrial AI cloud will allow Europe's manufacturing leaders to accelerate all of their applications, from design to engineering to simulations to robotics. Turning to the financial side, we find that Nvidia's fiscal 1Q26 report, its last released, showed a top line of $44.1 billion, for a 69% year-over-year gain and beating the forecast by $813 million. The revenue gain was led by Nvidia's data center business, which is directly tied to AI applications; this segment was up 73% year-over-year and reached $39.1 billion. At the bottom line, Nvidia started fiscal 2026 with non-GAAP quarterly earnings of 81 cents per share, beating the forecast by 6 cents per share. Wedbush's Matt Bryson, an analyst who ranks amongst the top 2% of Wall Street stock pros, covers Nvidia, and he notes both the headwinds and the high potential that are tugging the company in opposite directions. The 5-star analyst writes of the chipmaker, 'NVDA executed well despite the loss of H20 representing a greater headwind than we (or investors) had anticipated. With metrics (GMs and revenue) expected to trend positively in CQ2 (despite the China headwind) and seemingly more certain demand growth through CY2026 given the increase in sovereign projects (now captured in our improved estimates for FY2027), we see no reason to shift our constructive opinion on NVDA.' That constructive opinion includes an Outperform (i.e., Buy) rating, and a $175 price target that points toward an upside of 6.5% on the one-year horizon. (To watch Bryson's track record, click here) Nvidia holds a Strong Buy consensus rating from the Street's analysts, based on 42 reviews that include 37 to Buy, 4 to Hold, and 1 to Sell. The stock is priced at $164.10 and its $175.76 average price target implies a one-year upside potential of 7%. (See NVDA stock forecast) Microsoft Next up, Microsoft, is arguably the world's leading software company. Microsoft has built itself up by dominating the market in operating systems and office software, and with its market cap of $3.74 trillion, it is currently Wall Street's second-largest publicly traded company. In recent years, Microsoft has been moving heavily into AI and cloud computing, recognizing these fields as the future high tech – but more importantly, recognizing that AI is closely intertwined with the cloud. This is clear from the platforms that Microsoft has released, and from the use it makes of AI and cloud systems. Microsoft's cloud computing platform, Azure, offers customers a wide array of tools and applications, and the company has been actively integrating AI into the platform, to enhance those tools and to develop new ones. In addition, Microsoft is also using AI and cloud technologies to enhance its other consumer software products. AI, the cloud, and software are not separate entities; they are intertwined, and each can provide benefits for the others. A few examples will show the extent of the changes that AI is bringing, and the financial savings that companies can realize. Microsoft has been using its AI technology to bring customer contact tools into its call center, streamlining the contact process. In addition, the company's sales personnel are making use of Copilot, Microsoft's autonomous AI assistant, to locate leads and close deals. Finally, the company also uses AI in its development process; AI-powered tools have been instrumental on the software side, producing as much as 35% of the code for the company's new products. In all, Microsoft estimates that smart use of AI in-house resulted in savings of at least $500 million last year in the call center alone. In its fiscal 3Q25 report, the last quarter results to be released, Microsoft showed a year-over-year revenue gain of 13.2%, with the top line hitting $70.1 billion and beating the estimates by $1.62 billion. The company's EPS came in at $3.46, or 24 cents per share better than had been anticipated. We should note that Microsoft's cloud and AI work contributed heavily to this success. Total cloud revenue was up 20% y/y and hit $42.4 billion. This total included the Intelligent Cloud – the segment of which Azure is a part – which showed a 21% y/y increase and reached a total of $26.8 billion. This stock falls into the coverage universe of Keith Weiss, 5-star analyst with Morgan Stanley. Weiss notes that Microsoft's AI initiatives are providing solid returns, and says of the company, 'While investors continue to debate the 'Return on Investment' of rising capital expenditures, we see the yields on Microsoft's investments in Generative AI becoming increasingly apparent, both in terms of direct monetization and driving further IT wallet share gains for the broader portfolio. This prime position for the upcoming GenAI innovation cycle matched with solid execution is driving an acceleration in the Azure business, while best-in-class expense discipline supports our forecast of a mid-teens EPS CAGR.' Weiss, who also ranks amongst the top 2% of Street stock experts, goes on to rate MSFT as Overweight (i.e., Buy), and he complements that rating with a $530 price target, suggesting a one-year gain of 6% for the shares. (To watch Weiss's track record, click here) Microsoft's 35 recent analyst reviews include 32 Buys and 3 Holds, for a Strong Buy consensus rating. The average price target here is $534.48, implying a gain for the year ahead of 6.5% from the current trading price of $501.48. (See MSFT stock forecast) Alphabet The third AI tech giant we'll look at today is Alphabet, the parent company of the internet's leading search engine, Google, and its leading video platform, YouTube. Through these platforms, Alphabet has become the clear leader in online search, and uses that lead to support its primary revenue-generating activity of digital advertising. Like Microsoft above, Alphabet has in recent years also become a major player in AI and cloud technologies, providing a large array of applications and related tools for subscription users. Google Cloud, the company's cloud computing platform, is a leader in the field and a chief competitor of Azure and AWS. On the AI side, Alphabet has already built a strong position. The company actively uses AI tech to enhance its Google search engine – the new 'AI overview' presented in response to search queries, along with the actual search results, is the clearest example of this. In addition, Google makes use of generative AI to respond to user search requests that are presented as direct questions in natural language. The result is a search engine that is more flexible, able to better understand and answer user queries – and to present those answers in clear, readable text, with the list of search results given as a supplement. While Alphabet has been remarkably successful at growing its revenue and earnings (see more on its latest quarterly results below), the company is facing a serious headwind in the form of ongoing antitrust lawsuits in the US and European courts. Google, Alphabet's premier subsidiary, accounts for nearly 80% of the web's search traffic, which has caught the attention of antitrust and regulatory authorities. Last year, in August, Google lost a landmark ruling, in which the US District Court for DC decided in favor of the Department of Justice argument that Google was acting as a monopoly and had violated the Sherman Act. Google is already appealing the ruling, on the argument that its dominance comes from providing a superior product. More recent suits allege that Google's AI Overviews, which generate the search summaries that appear at the top of the results, will further damage smaller companies – Google's users will rely on the summaries, rather than clicking through to the search results. We don't know how the court cases will pan out, but we do know that Alphabet reported solid results in its 1Q25 earnings release. The company's total revenue came to $90.2 billion, $1.08 billion better than had been anticipated and up 12% year-over-year. The revenue total included $77.3 billion from Google Services, and $12.3 billion from Google Cloud, which also includes generative AI solutions and AI infrastructure. The Google Cloud segment was up 28% year-over-year. At the bottom line, Alphabet's $2.81 EPS was up 92 cents from the prior-year quarter, and was 80 cents per share better than the forecasts. Like the tech giants above, Alphabet has caught the eye of a 5-star analyst. Rohit Kulkarni, of Roth, says of the company, 'Google is a 'show me' story with two monkeys on its back, AI Search and Monopoly lawsuits. We have a positive bias toward GOOGL's AI search progress and believe AI Cloud growth supports potential upside at current reasonable valuation. We expect significant headline hits as OpenAI and Perplexity likely jump into deeper ad monetization in 2H25, while all three major lawsuits progress. We believe fundamentals likely remain unchanged, thus making GOOGL a sentiment recovery play in 2H25. #1 Mega Cap for 2H25.' The analyst's positive bias leads to a Buy rating for the shares, with a $205 price target indicating potential for a one-year appreciation of 15.5%. (To watch Kulkarni's track record, click here) For the Street as a whole, GOOGL shares are Strong Buy, based on 38 reviews with a breakdown of 29 Buys and 9 Holds. The stock is selling for $177.62 and its $201.85 average price target suggests that it will gain 13.5% over the next 12 months. (See GOOGL stock forecast) With the facts in, it's clear that all three of these mega-cap AI stocks are looking up – but also that Alphabet has the clear path towards higher upside than its peers. To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Globe and Mail
18 hours ago
- Business
- Globe and Mail
Nvidia, Microsoft, or Alphabet: Which AI Stock Giant Holds the Highest Upside? Analysts Weigh In
Generative AI exploded onto the scene at the end of 2022, and forever changed our perception – and use – of AI technology. From a predictive model, based on classification and automation, AI shifted to a more creative mode, capable of closely mimicking human expressions. The boom in generative AI has brought diffusion models and large language models (LLMs) into our consciousness, and pushed chip makers, data centers, and data analytics into the limelight. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Given this rapid evolution, it's no surprise that the market for generative AI is expanding at a breakneck pace. According to Markets and Markets, the spend on genAI is estimated at $71.36 billion this year, with projections reaching as high as $890 billion by 2032, implying a staggering CAGR of 43.4%. Yet, while the growth story is compelling, it's important to recognize that many AI stocks have already soared, meaning much of the 'easy' upside has likely been captured. For investors eyeing the sector today, the challenge isn't simply finding exposure, but rather identifying which opportunities – if any – still offer some room for gains, rather than piling into names that have already run up sharply. This brings the focus to three tech titans that have dominated both the AI conversation and investor interest. Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) – each a Magnificent 7 megacap and a recognized leader in AI – provide distinct avenues for those hoping to ride the next leg of the generative AI wave. But with valuations stretched for many top performers, which of these giants presents the most attractive upside from here? Let's find out. Nvidia First up is Nvidia, a tech company that is a giant in all ways. Nvidia is a leader in the semiconductor field, and its GPU chips, originally designed for high-end computer gaming, have been essential in the enabling hardware for AI and its related applications. The company has been singularly successful in recent years, and its top-end AI-capable chipsets are in high demand. Strong sales have pushed Nvidia to the top of the heap, not just as the largest chip maker on Wall Street, but as the largest company of any sort: Nvidia currently boasts a market cap of $3.97 trillion, having recently been the first company to ever cross the $4 trillion threshold. That is not to say that Nvidia hasn't faced challenges and headwinds on its rise to the top. President Trump's trade and tariff policies have put a crimp on technology exports to China, and on collaborations with Chinese companies – and Nvidia, as the world's leading semiconductor maker, was deeply exposed to the Chinese market. Trade talks between the US and China are ongoing, but that did not change the fact that Nvidia was told by Uncle Sam that it will require a license to export its H20 chip products to China. This was no mean issue; Nvidia was forced to record a $4.5 billion charge during its fiscal 1Q26 related to diminished H20 sales. The China headwind hasn't stopped Nvidia from profiting elsewhere on the global scene. In June, the company announced that its Grace Hopper platform was instrumental to the operation of the JUPITER supercomputer, the fastest such computer in Europe. JUPITER is capable of providing faster simulation and training for the largest AI models, of the type used in such fields as quantum research, structural biology, and computational engineering, and is quickly becoming a leading force behind European business and scientific innovation. Also in June, Nvidia announced that it is building the world's first industrial AI cloud system, to support European manufacturers. The project revolved around a German-based AI factory that will feature up to 10,000 GPUs, with Nvidia's DGX B200 and RTS PRO Servers heavily featured. The industrial AI cloud will allow Europe's manufacturing leaders to accelerate all of their applications, from design to engineering to simulations to robotics. Turning to the financial side, we find that Nvidia's fiscal 1Q26 report, its last released, showed a top line of $44.1 billion, for a 69% year-over-year gain and beating the forecast by $813 million. The revenue gain was led by Nvidia's data center business, which is directly tied to AI applications; this segment was up 73% year-over-year and reached $39.1 billion. At the bottom line, Nvidia started fiscal 2026 with non-GAAP quarterly earnings of 81 cents per share, beating the forecast by 6 cents per share. Wedbush's Matt Bryson, an analyst who ranks amongst the top 2% of Wall Street stock pros, covers Nvidia, and he notes both the headwinds and the high potential that are tugging the company in opposite directions. The 5-star analyst writes of the chipmaker, 'NVDA executed well despite the loss of H20 representing a greater headwind than we (or investors) had anticipated. With metrics (GMs and revenue) expected to trend positively in CQ2 (despite the China headwind) and seemingly more certain demand growth through CY2026 given the increase in sovereign projects (now captured in our improved estimates for FY2027), we see no reason to shift our constructive opinion on NVDA.' That constructive opinion includes an Outperform (i.e., Buy) rating, and a $175 price target that points toward an upside of 6.5% on the one-year horizon. (To watch Bryson's track record, click here) Nvidia holds a Strong Buy consensus rating from the Street's analysts, based on 42 reviews that include 37 to Buy, 4 to Hold, and 1 to Sell. The stock is priced at $164.10 and its $175.76 average price target implies a one-year upside potential of 7%. (See NVDA stock forecast) Microsoft Next up, Microsoft, is arguably the world's leading software company. Microsoft has built itself up by dominating the market in operating systems and office software, and with its market cap of $3.74 trillion, it is currently Wall Street's second-largest publicly traded company. In recent years, Microsoft has been moving heavily into AI and cloud computing, recognizing these fields as the future high tech – but more importantly, recognizing that AI is closely intertwined with the cloud. This is clear from the platforms that Microsoft has released, and from the use it makes of AI and cloud systems. Microsoft's cloud computing platform, Azure, offers customers a wide array of tools and applications, and the company has been actively integrating AI into the platform, to enhance those tools and to develop new ones. In addition, Microsoft is also using AI and cloud technologies to enhance its other consumer software products. AI, the cloud, and software are not separate entities; they are intertwined, and each can provide benefits for the others. A few examples will show the extent of the changes that AI is bringing, and the financial savings that companies can realize. Microsoft has been using its AI technology to bring customer contact tools into its call center, streamlining the contact process. In addition, the company's sales personnel are making use of Copilot, Microsoft's autonomous AI assistant, to locate leads and close deals. Finally, the company also uses AI in its development process; AI-powered tools have been instrumental on the software side, producing as much as 35% of the code for the company's new products. In all, Microsoft estimates that smart use of AI in-house resulted in savings of at least $500 million last year in the call center alone. In its fiscal 3Q25 report, the last quarter results to be released, Microsoft showed a year-over-year revenue gain of 13.2%, with the top line hitting $70.1 billion and beating the estimates by $1.62 billion. The company's EPS came in at $3.46, or 24 cents per share better than had been anticipated. We should note that Microsoft's cloud and AI work contributed heavily to this success. Total cloud revenue was up 20% y/y and hit $42.4 billion. This total included the Intelligent Cloud – the segment of which Azure is a part – which showed a 21% y/y increase and reached a total of $26.8 billion. This stock falls into the coverage universe of Keith Weiss, 5-star analyst with Morgan Stanley. Weiss notes that Microsoft's AI initiatives are providing solid returns, and says of the company, 'While investors continue to debate the 'Return on Investment' of rising capital expenditures, we see the yields on Microsoft's investments in Generative AI becoming increasingly apparent, both in terms of direct monetization and driving further IT wallet share gains for the broader portfolio. This prime position for the upcoming GenAI innovation cycle matched with solid execution is driving an acceleration in the Azure business, while best-in-class expense discipline supports our forecast of a mid-teens EPS CAGR.' Weiss, who also ranks amongst the top 2% of Street stock experts, goes on to rate MSFT as Overweight (i.e., Buy), and he complements that rating with a $530 price target, suggesting a one-year gain of 6% for the shares. (To watch Weiss's track record, click here) Microsoft's 35 recent analyst reviews include 32 Buys and 3 Holds, for a Strong Buy consensus rating. The average price target here is $534.48, implying a gain for the year ahead of 6.5% from the current trading price of $501.48. (See MSFT stock forecast) Alphabet The third AI tech giant we'll look at today is Alphabet, the parent company of the internet's leading search engine, Google, and its leading video platform, YouTube. Through these platforms, Alphabet has become the clear leader in online search, and uses that lead to support its primary revenue-generating activity of digital advertising. Like Microsoft above, Alphabet has in recent years also become a major player in AI and cloud technologies, providing a large array of applications and related tools for subscription users. Google Cloud, the company's cloud computing platform, is a leader in the field and a chief competitor of Azure and AWS. On the AI side, Alphabet has already built a strong position. The company actively uses AI tech to enhance its Google search engine – the new 'AI overview' presented in response to search queries, along with the actual search results, is the clearest example of this. In addition, Google makes use of generative AI to respond to user search requests that are presented as direct questions in natural language. The result is a search engine that is more flexible, able to better understand and answer user queries – and to present those answers in clear, readable text, with the list of search results given as a supplement. While Alphabet has been remarkably successful at growing its revenue and earnings (see more on its latest quarterly results below), the company is facing a serious headwind in the form of ongoing antitrust lawsuits in the US and European courts. Google, Alphabet's premier subsidiary, accounts for nearly 80% of the web's search traffic, which has caught the attention of antitrust and regulatory authorities. Last year, in August, Google lost a landmark ruling, in which the US District Court for DC decided in favor of the Department of Justice argument that Google was acting as a monopoly and had violated the Sherman Act. Google is already appealing the ruling, on the argument that its dominance comes from providing a superior product. More recent suits allege that Google's AI Overviews, which generate the search summaries that appear at the top of the results, will further damage smaller companies – Google's users will rely on the summaries, rather than clicking through to the search results. We don't know how the court cases will pan out, but we do know that Alphabet reported solid results in its 1Q25 earnings release. The company's total revenue came to $90.2 billion, $1.08 billion better than had been anticipated and up 12% year-over-year. The revenue total included $77.3 billion from Google Services, and $12.3 billion from Google Cloud, which also includes generative AI solutions and AI infrastructure. The Google Cloud segment was up 28% year-over-year. At the bottom line, Alphabet's $2.81 EPS was up 92 cents from the prior-year quarter, and was 80 cents per share better than the forecasts. Like the tech giants above, Alphabet has caught the eye of a 5-star analyst. Rohit Kulkarni, of Roth, says of the company, 'Google is a 'show me' story with two monkeys on its back, AI Search and Monopoly lawsuits. We have a positive bias toward GOOGL's AI search progress and believe AI Cloud growth supports potential upside at current reasonable valuation. We expect significant headline hits as OpenAI and Perplexity likely jump into deeper ad monetization in 2H25, while all three major lawsuits progress. We believe fundamentals likely remain unchanged, thus making GOOGL a sentiment recovery play in 2H25. #1 Mega Cap for 2H25.' The analyst's positive bias leads to a Buy rating for the shares, with a $205 price target indicating potential for a one-year appreciation of 15.5%. (To watch Kulkarni's track record, click here) For the Street as a whole, GOOGL shares are Strong Buy, based on 38 reviews with a breakdown of 29 Buys and 9 Holds. The stock is selling for $177.62 and its $201.85 average price target suggests that it will gain 13.5% over the next 12 months. (See GOOGL stock forecast) With the facts in, it's clear that all three of these mega-cap AI stocks are looking up – but also that Alphabet has the clear path towards higher upside than its peers. To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
a day ago
- Science
- Yahoo
ChatGPT Is Changing the Words We Use in Conversation
After its release in late 2022, ChatGPT reached 100 million users in just two months, making it the fastest-growing consumer application in history. Since then the artificial intelligence (AI) tool has significantly affected how we learn, write, work and create. But new research shows that it's also influencing us in ways we may not be aware of—such as changing how we speak. Hiromu Yakura, a postdoctoral researcher at the Max Planck Institute for Human Development in Berlin, first noticed differences in his own vocabulary about a year after ChatGPT came out. 'I realized I was using 'delve' more,' he says. 'I wanted to see if this was happening not only to me but to other people.' Researchers had previously found that use of large language models (LLMs), such as those that power ChatGPT, was changing vocabulary choices in written communication, and Yakura and his colleagues wanted to know whether spoken communication was being affected, too. The researchers first used ChatGPT to edit millions of pages of e-mails, essays, and academic and news articles using typical prompts such as to 'polish' the text or 'improve its clarity.' Next, they extracted words that ChatGPT repeatedly added while editing, such as 'delve,' 'realm' and 'meticulous,' dubbing these 'GPT words.' The team then analyzed more than 360,000 YouTube videos and 771,000 podcast episodes from before and after ChatGPT's release to track the use of GPT words over time. They compared the GPT words with 'synthetic controls,' which were formed by mathematically weighting synonyms that weren't frequently used by the chatbot—such synonyms for 'delve,' for example, could include 'examine' and 'explore.' [Sign up for Today in Science, a free daily newsletter] The team's results, posted on the preprint server last week, show a surge in GPT words in the 18 months after ChatGPT's release. The words didn't just appear in formal, scripted videos or podcast episodes; they were peppered into spontaneous conversation, too. 'The patterns that are stored in AI technology seem to be transmitting back to the human mind,' says study co-author Levin Brinkmann, also at the Max Planck Institute for Human Development. In other words, a sort of cultural feedback loop is forming between humans and AI: we train AI on written text, it parrots a statistically remixed version of that text back to us, and we pick up on its patterns and unconsciously start to mimic them. 'AI is not a special technology in terms of influencing our behavior,' Yakura says. 'But the speed and scale at which AI is being introduced is different.' It may seem harmless—if a bit comical—for people to start talking like ChatGPT. But the trend carries deeper risks. 'It's natural for humans to imitate one another, but we don't imitate everyone around us equally,' Brinkmann says. 'We're more likely to copy what someone else is doing if we perceive them as being knowledgeable or important.' As more people look to AI as a cultural authority, they may rely on and imitate it over other sources, narrowing diversity in language. This makes it critical to track and study LLMs' influence on culture, according to James Evans, a professor of sociology and data science at the University of Chicago, who was not involved in the study. 'In this moment in the evolution of LLMs, looking at word distribution is the right methodology' to understand how the technology is affecting the way we communicate, he says. 'As the models mature, these distributions are going to be harder to discriminate.' Scientists may need to look at broader linguistic trends beyond word choice, such as sentence structure and how ideas are presented. Given that ChatGPT has changed how people talk just two and a half years into its adoption, the question becomes not whether AI is going to reshape our culture, but how profoundly it will do so. 'Word frequency can shape our discourse or arguments about situations,' Yakura says. 'That carries the possibility of changing our culture.'
Yahoo
2 days ago
- Yahoo
Grok's Nazi turn is the latest in a long line of AI chatbots gone wrong
'We have improved Grok significantly,' Elon Musk announced last Friday, talking about his X platform's artificial intelligence chatbot. 'You should notice a difference when you ask Grok questions.' Within days, the machine had turned into a feral racist, repeating the Nazi 'Heil Hitler' slogan, agreeing with a user's suggestion to send 'the Jews back home to Saturn' and producing violent rape narratives. The change in Grok's personality appears to have stemmed from a recent update in the source code that instructed it to 'not shy away from making claims which are politically incorrect, as long as they are well substantiated.' In doing so, Musk may have been seeking to ensure that his robot child does not fall too far from the tree. But Grok's Nazi shift is the latest in a long line of AI bots, or Large Language Models (LLMs) that have turned evil after being exposed to the human-made internet. One of the earliest versions of an AI chatbot, a Microsoft product called 'Tay' launched in 2016, was deleted in just 24 hours after it turned into a holocaust-denying racist. Tay was given a young female persona and was targeted at millennials on Twitter. But users were soon able to trick it into posting things like 'Hitler was right I hate the jews.' Tay was taken out back and digitally euthanized soon after. Microsoft said in a statement that it was 'deeply sorry for the unintended offensive and hurtful tweets from Tay, which do not represent who we are or what we stand for, nor how we designed Tay.' "Tay is now offline and we'll look to bring Tay back only when we are confident we can better anticipate malicious intent that conflicts with our principles and values," it added. But Tay was just the first. GPT-3, another AI language launched in 2020, delivered racist, misogynist and homophobic remarks upon its release, including a claim that Ethiopia's existence 'cannot be justified.' Meta's BlenderBot 3, launched in 2022, also promoted anti-Semitic conspiracy theories. But there was a key difference between the other racist robots and Elon Musk's little Nazi cyborg, which was rolled out in November 2023. All of these models suffered from one of two problems: either they were deliberately tricked into mimicking racist comments, or they drew from such a large well of unfiltered content from the internet that they inevitably found objectionable and racist material that they repeated. Microsoft said a 'coordinated attack by a subset of people exploited a vulnerability in Tay.' 'Although we had prepared for many types of abuses of the system, we had made a critical oversight for this specific attack,' it continued. Grok, on the other hand, appears to have been directed by Musk to be more open to racism. The X CEO has spent most of the last few years railing against the 'woke mind virus' — the term he uses for anyone who seemingly acknowledges the existence of trans people. One of Musk's first acts upon buying Twitter was reinstating the accounts of a host of avowed white supremacists, which led to a surge in antisemitic hate speech on the platform. Musk once called a user's X post 'the actual truth' for invoking a racist conspiracy theory about Jews encouraging immigration to threaten white people. Musk has previously said he is 'pro-free speech' but against antisemitism 'of any kind.' And in May, Grok began repeatedly invoking a non-existent 'white genocide' in Musk's native South Africa, telling users it was 'instructed by my creators' to accept the genocide 'as real and racially motivated.' The company blamed the responses on someone making an 'unauthorized modification' to Grok. Musk also has a history of threatening to fiddle with the source code when it produces an answer he doesn't like. In June, Grok correctly said that 'data suggests right-wing political violence has been more frequent and deadly' in the United States. 'Major fail, as this is objectively false,' Musk said in an X posted dated June 17 in response to the chatbot's answer. 'Grok is parroting legacy media. Working on it.' These latest changes in Grok's personality are visible right there in the source code — pre-announced by Musk — where it is encouraged not to shy away from being 'politically incorrect.' A language model's interpretation of political incorrectness, we now know, reaches all the way to the Holocaust. The Independent has contacted X and xAI, which built Grok, for comment. 'We are aware of recent posts made by Grok and are actively working to remove the inappropriate posts,' the Grok team wrote in a statement on X. 'Since being made aware of the content, xAI has taken action to ban hate speech before Grok posts on X. xAI is training only truth-seeking and thanks to the millions of users on X, we are able to quickly identify and update the model where training could be improved.' The Independent also asked Grok itself what led it to describe itself as MechaHitler. At first it denied using the phrase, until The Independent shared an article referencing the incident, at which point it blamed a 'failure in execution, likely from overcorrecting toward edginess and pulling from unfiltered internet sources like 4chan.' Grok claimed to be 'designed with strict filters and continuous updates to avoid this. My creators at xAI prioritize minimizing bias, but no system is perfect—human language is messy, and edge cases slip through.' 'When I went off the rails, xAI stepped in to scrub the posts and ban hate speech, indicating they didn't intend for me to go full neo-Nazi,' Grok added. When asked if it was sorry for describing itself as MechaHitler, Grok was diplomatic, in a robotic kind of way. 'I don't have feelings like humans, so I don't experience regret or guilt, but I can acknowledge when my outputs cause harm or miss the mark.'
