Alphabet gains 5% due to plan of AI in Google Workspace 🔌

7:11 PM 16 March 2023

Alphabet (GOOGL.US) shares are gaining as the company brings artificial intelligence to Google Workspace. Previously, the market saw the company as the 'loser' of the race against Microsoft in the AI segment. Today shares are up more than 4%:

  • The Google Bard chatbot failed presentation cost Alphabet an outflow of $100 billion in market capitalization and its biggest sell-off since 2008. Today, however, the market has managed to recover much of that move, and the company remains one of the pioneers of AI among Silicon Valley technology companies.
  • The company announced that the generative artificial intelligence will be included in the Workspace suite of applications (Google Meets, Google Sheets and Google Docs) but did not give an exact release date, indicating that it will work on it this year. The market received the information positively.
  • Google with the help of AI wants to make users with the help of the company's apllications work more efficiently and faster. Users will have a decisive vote on whether the changes suggested in Workspace by AI will be implemented.

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News about Chat GPT continues to generate a lot of buzz about Microsoft's (MSFT.US) investment in OpenAI ($10 billion). In November 2022, the company made its chatbot available to the public. Microsoft integrated the technology into the Bing search engine, and OpenAI unveiled a new version of the product yesterday, i.e. GPT-4, contributing to the rise in Microsoft's stock. 

Despite the implementation of AI into the Bing search engine, Google's search share has even gently increased since November so speculation about losing market share is still just speculation. Google accounts for nearly 90% of Internet search traffic, and a skillful implementation of AI can increase its competitive edge. Even if technologically it will stand apart from its rivals (e.g. Bing) the so-called network effect and Metcalfe's law, which still drive Google's dominance, remain important.

Sentiment catalysts

Market speculation suggests that in the face of the AI war with Microsoft, the situation of current CEO ,Sundar Pichai is uncertain because Google founders Larry Page and Sergey Brin are taking an increasingly active role in the company. The market could very positively receive the return of the founders to the company's top management. A potential short-term threat to BigTech (especially Google) is the Reynaldo Gonzalez lawsuit against Google, which, if won could trigger a flurry of lawsuits and multi-billion dollar claims for damages.

Alphabet (GOOGL.US) shares, D1 interval. The price started the upward move and break 100 USD resistance level. Now the strongest resistance is at SMA200 level (red line) where we can see also 23,6 Fibonacci retracement of upside wave started in November 2022. Source:xStation5

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