We recently published a list of 10 AI Stocks Trending on News and Analyst Ratings. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other AI stocks trending on news and analyst ratings.
In a surprising turn of events, a consortium led by Elon Musk said on Monday that it has offered $97.4 billion to buy the nonprofit that controls OpenAI. Marc Toberoff, Musk’s attorney, confirmed that he submitted the bid for all OpenAI’s assets to its board.
The offer is a twist to Musk and OpenAI CEO Sam Altman’s rift that began last August when Musk filed a lawsuit against OpenAI. The lawsuit accused the company of putting profits before its initial nonprofit mission which aimed to advance AI in a way that benefits humanity.
The two prominent figures of the tech world are still involved in a legal battle over the future of this AI startup.
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Analysts have been skeptical of Musk’s move ever since it came to light.
“I think it’s fair to be pretty suspicious of this considering that he has a competitor himself… which is structured as a for-profit company, so I think there’s more than meets the eye here”.
– Christie Pitts, a tech investor in San Francisco, told the BBC.
Sam Altman has this to say about the bid:
Musk was “a competitor who is not able to beat us in the market and you know, instead is just trying to say, like, ‘I’m gonna buy this’ with total disregard for the mission”.
– Altman told Axios
Plus, this is what Altman wrote on X as a reply to Musk’s bid:
“No thank you but we will buy twitter for $9.74 billion if you want.”
OpenAI was cofounded by Musk and Altman in 2018 as a non-profit, with Musk leaving before the company took off. Musk’s lawsuit against OpenAI and Altman says that the founders originally approached him to fund a nonprofit focused on developing AI to benefit humanity. However, it was now focused on making money.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens.”
-Elon Musk
On the contrary, Altman said that he has no interest in the offer, stating that OpenAI is not for sale.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. Wall Street was disappointed after Alphabet (NASDAQ:GOOG) posted its Q4 results, particularly because of the hefty AI spend it forecast. Management projected a $75 billion in FY25 capex to expand capacity for AI demand. Expenses are also expected to rise in 2025, driven by higher depreciation from elevated capex and increased investments in AI and Cloud talent. Nevertheless, Goldman Sachs’ Eric Sheridan has highlighted “continued revenue momentum” for the stock based on robust performance in Search across all verticals, decent YouTube Ads results, and positive early engagement with AI Overviews. Moreover, despite significant AI-related investments, operating margins also beat expectations. Generative AI and a “more normalized overall enterprise computing landscape have also positively placed Alphabet’s cloud business. Due to these factors, the firm rated Alphabet stock as a “Buy” with a $220 price target, as reported by TipRanks on February 10th.
“Away from any short-term debates, we continue to view Alphabet as well-positioned against both the current (mixture of desktop and mobile utility) and potential future (AI/ML; personalization; lowered friction to applications) computing landscapes. We continue to advocate that the combination of AI distribution at scale (collection 1b+ user applications) and scale of compute to both invest and drive efficiencies remain as a dual under-appreciated narrative in terms of AI over the long-term, particularly as we move from the ‘infrastructure’ to ‘platform’ and ‘application’ layers of AI monetization.”
– Goldman Sachs’ Eric Sheridan
Overall, GOOGL ranks 4th on our list of AI stocks trending on news and analyst ratings. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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