Alphabet (NASDAQ:GOOG, GOOGL) stock has endured its fair share of challenges in recent times. Amid the tech sector, layoffs in 2022 and higher interest rates affecting bottom line growth. However, as we look toward 2024, the advent of AI makes the stock a compelling investment opportunity.
Their parent company, Google, is making significant advancements in generative AI set to revolutionize search. Their recent quarterly earnings show positive signs of a rebound in the advertising market. This is crucial to Alphabet’s bottom line, and their new Gemini Ultra LLM will be groundbreaking as they work to gain a competitive edge.
Advertising Revenue Growth
Alphabet’s financial health is closely tied to the advertising market, with Google Search and YouTube being the key revenue drivers. Despite a rough patch in 2023, recent quarterly earnings point to a resurgence in ad revenue.
In Q4 2023, there were clear signs of recovery, specifically growth driven by the retail sector in the Asia-Pacific region. YouTube ad revenue increased 15% YOY to $9.2 billion, with Google Search and Cloud driving double digit growth.
The broader economy is stabilizing as CEO anticipate rate cuts from the Federal Reserve in the back half of 2024. Alphabet’s core business is likely to benefit significantly. This combined with the potential of new advertising channels driven by generative AI integrations, paints a positive picture for revenue growth in 2024 and beyond.
Gemini Ultra’s Game Changing AI Capabilities
Alphabet is currently at the forefront of artificial intelligence and deep learning research. Discoveries and advancements in LLMs, like Google’s Gemini Ultra model, offer transformative potential across various industries and domains.
Gemini Ultra boasts superior multimodal capabilities in language understanding, knowledge retrieval, and generation could lead to improved business processes. It is well equipped to train diverse data sets, while maintaining the most up-to-date information in order to reduce biases.
The model leverages the latest advancements in natural language processing to accelerate vocabulary acquisition, grammar comprehension and speed. Gemini 1.5 is their next-generation model with breakthroughs in long-context understanding. This advanced model outperforms its competitor, ChatGPT, on nearly every benchmark from general, reasoning, math, and code generation.
Alphabet Stock: Buy Each and Every Dip
Alphabet stock presents a strong investment case for investors looking to capitalize on the AI boom. The company’s potential to leverage generative AI in its search engine and advance their LLM could help them gain a competitive edge in the marketplace.
The stock market is setting up for volatility ahead, and Alphabet may experience some turbulence in the short term. That will provide investors with ample opportunities to buy the dip before the next rip to $200.00 per share and beyond.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
