We recently compiled a list of the Top 14 AI Stocks on Wall Street: News and Analyst Ratings. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other AI stocks.
In an update on the bid by an Elon Musk-led consortium to buy the non-profit that controls OpenAI, Musk’s lawyers have reportedly stated in a court filing that they will withdraw the $97.4 billion bid if the AI startup drops its plans to become a for-profit entity.
Musk is trying hard to keep OpenAI from becoming a for-profit entity, even filing a case against Altman in August. Musk co-founded the artificial intelligence startup with Sam Altman but left the company in 2018 after a disagreement with Altman and other cofounders over OpenAI’s direction and funding.
The filing noted that Musk will withdraw the bid if the OpenAI board is “prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion. “
Otherwise, “the charity must be compensated by what an arms-length buyer will pay for its assets.”
-The filing in U.S. District Court, Northern District of California, said, as reported by Reuters.
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In its filing with the same court on Wednesday, OpenAI said that Musk’s bid to buy OpenAI contradicts the arguments he is making in court that the startup’s assets cannot be transferred for private gain. It seems to be “an improper bid to undermine a competitor.” Even though Musk seemingly wants OpenAI to retain its non-profit structure, OpenAI noted that in his bid, he wants OpenAI to be sold to himself.
“In this Court, Musk argues that OpenAI, Inc.’s assets cannot be ‘transferred away’ for ‘private gain. But out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers. Musk would have OpenAI, Inc. transfer all of its assets to him, for his economic benefit and that of his competing AI business and hand-picked private investors.”
-OpenAI said in a legal filing.
It is to be noted here that OpenAI is under no obligation to consider the bid.
“The independent Board’s sole fiduciary duty is to the mission of ensuring AGI benefits all of humanity. Respectfully, it is not up to a competitor to decide what is in the best interests of OpenAI’s mission.”
-Andrew Nussbaum, counsel to the OpenAI Board at Wachtell, Lipton, Rosen & Katz.
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.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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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. On February 13, Mizuho Securities reiterated an “Outperform” rating and reduced the price target from $235 to $230. The analyst’s buy rating stems from several factors. First, the company’s advertising revenues have exceeded expectations. Robust growth in insurance, retail, and political advertising has led to strong performances in both Search and YouTube.
Advertising strength has boosted overall revenue for the company, exceeding market consensus. Moreover, the company’s demand for Core GCP products and AI infrastructure remains high, despite capacity constraints leading to Cloud revenue growth below expectations. This implies that potential revenue may grow for the company as capacity issues are resolved. The company’s strategic capex investments in AI and custom ASICs further echo management’s confidence in long-term growth.
Overall GOOG ranks 4th on our list of AI stocks that are trending on Wall Street. While we acknowledge the potential of GOOG 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 timeframe. If you are looking for an AI stock that is more promising than GOOG 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.
