An analyst at Bank of America advises investors to consider the potential benefits and risks of Alphabet (GOOGL), the parent company of Google, before considering charging customers for its new AI-powered internet search tools. In response to a Financial Times story, Google’s stock dropped on Thursday.
“(According to the FT), Google would add certain AI-powered search features to its premium subscription tier, which already offers access to Gemini AI assistant in Gmail and Docs,” stated Justin Post, a BofA analyst, in a report”Google’s traditional search engine would remain free, and ads would continue to appear alongside search results, even for subscribers.”
AI Benefits And Risks For Google Stock:
How incorporating chatbot AI technology into search inquiries will affect advertising income has been a major concern for GOOGL shares. Analysts predict that during the Google I/O 2024 developers conference in May, Alphabet will improve its approach.
Google’s stock exited a buy zone on the stock market today, closing at 150.53 after falling 2.8%. In 2024, Google’s stock has increased by 8%.
According to the FT article, Google has not decided whether to charge for AI-search functionality.
“We believe consideration for charging users for AI-powered search features would either stem from added AI computing/licensing expenses, or lower early ad click-through rates, for AI driven search results,” according to BofA’s Post. “While the monetization of AI search and Gen-AI capabilities is in nascent phase, introducing a paid tier for premium capabilities would allow Google to recover a portion of the costs without compromising margins.”ok
Conference on Google Cloud Computing:
Post continued, saying, “On the positive side, competitors have viewed Google’s paid business model as beneficial, and if new AI services have the potential to attract additional paid users, that might be beneficial for Google as well. The possibility that Google may launch a premium service raises the possibility that AI-driven search results will cause a few disruptions to the free search market.
From April 9 to April 11, Google will hold its yearly conference on cloud computing.
IBD Stock Checkup gives GOOGL stock an IBD Relative Strength Rating of 82 out of a possible 99. In the last 12 months, it has surpassed 82% of stocks, according to this.