Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Street
The Street
Business
Rob Lenihan

Analyst resets Google-parent Alphabet's stock price target after survey

Tony Soprano leaned back in his chair, his eyes carefully studying his visitor.

“What brings you to my neck of the woods?” the TV mobster asked.

“I need information. What is the capital of Iowa?"

Tony chuckled at the unexpected question, a smirk on his face.

"You're kiddin' me, right? Iowa?" he said in his distinctive voice. "Capital's Des Moines. Why do you need to know that?"

"I was curious," came the response.

Tony raised an eyebrow, a hint of amusement in his voice.

"Curiosity, huh?" he said. "Ain't nobody just curious about random state capitals for no reason. You're holding something back."

The preceding conversation did not take place at Satriale’s Pork Store, the Bada Bing! Strip club or any of the famed gangster's other familiar haunts.

And this Tony Soprano isn't the beloved HBO character portrayed by the late James Gandolfini from 1999 to 2007. 

Stick with me. I'll explain.

Sundar Pichai, CEO of Google and Alphabet, attends the Germany Women and Google Partnership event at Google's Berlin office on May 25, 2023. (Photo by Boris Streubel/Getty Images for DFB)

Boris Streubel/Getty Images

Creating and conversing with chatbots

No, this conversation was created by Character.ai, a neural language model chatbot service that can generate human-like text responses

Users can engage in dialogues with fictional, historical and celebrity figures.

Related: Nvidia stock targets $4 trillion valuation on AI chip outlook

Character.ai was launched in 2022 by two former employees of Google Brain, a deep-learning artificial intelligence research team under the umbrella of Google AI, a division at Google dedicated to AI research.

The team merged with the former Google sister company DeepMind to form Google DeepMind last year.

Character.ai is mostly free to use and attracts 3.5 million daily users, who spend an average of two hours a day using or even designing the platform’s AI-powered chatbots, The Verge reported in May.

Now, Google's parent, Alphabet  (GOOGL) , is reportedly developing a product for creating and conversing with customizable chatbots, which could be modeled after user-made celebrities. 

The bots would be similar to the online personalities from Facebook parent Meta Platforms  (META)  and Character.AI, and based on celebrities like football star Tom Brady and, yes, Tony Soprano, according to The Information, which cited people with direct knowledge of the project.

The chatbots could be launched as soon as this year and will be powered by the company’s Gemini chatbot. That's Google's equivalent of Microsoft  (MSFT) -backed OpenAI's ChatGPT, a large-language-model AI chatbot that launched on Nov. 30, 2022, and is credited with starting the artificial intelligence revolution.

It is unknown which celebrities will be included. Google is reportedly also trying to strike partnerships with influencers, and the company is working on a feature that will let people create their own chatbots by describing their personalities and appearances.

Alphabet did not immediately respond to a request for comment.

Alphabet CEO Pichai: 'AI-first company since 2016'

With all this talk about the AI revolution, some people might think Alphabet has been something of a Tony-come-lately. 

Alphabet CEO Sundar Pichai begs to differ.

"We've been an AI-first company since 2016, pioneering many of the modern breakthroughs that power AI progress for us and for the industry," he told analysts during the company's first-quarter earnings call in April.

Alphabet's first-quarter earnings beat Wall Street's expectations, and Pichai said that "We rolled out Gemini 1.5 Pro, which shows dramatic performance enhancements across a number of dimensions."

"We have the best infrastructure for the AI era," he told analysts. "Building world-leading infrastructure is in our DNA, starting in our earliest days when we had to design purpose-built hardware to power search."  

TheStreet Pro’s Bob Lang certainly appreciates Alphabet's early AI efforts.

More AI Stocks:

"With all the hype created from AI and the companies providing this new and exciting service (like Nvidia  (NVDA)  undefined), other names have fallen off the radar,” Lang said earlier this month. 

"Let's understand this, though: The AI revolution was probably started by Alphabet/Google; they have been doing it for years," Lang added.

He noted that recreating the scenario is another story, and "many investors have been worried the company may be left behind."

Related: Analyst updates Oracle stock price target after earnings

"After all, when you have competitors such as Microsoft   (MSFT) , Apple  (AAPL) , and even Amazon  (AMZN)  nipping at your heels, then you had better be ready to fight," he said.

Lang said that Google’s first-quarter earnings were "very strong as the company also announced a huge share buyback." 

"That is putting a nice floor underneath the stock," he said. "As the implied volatility wears off (as often happens after earnings) we see how the stock moves without any influences. So far, so good, from our perspective."

Lang said he expected to see more upside "once big investors see how much of a bargain Google is relative to its peers, and they realize the AI phenomenon is big with Alphabet."

Jefferies raises price target on Alphabet shares

On June 26, Jefferies analyst Brent Thill raised the firm's price target on Alphabet to $215 from $200 and affirmed a buy rating on the shares after having surveyed more than 1,500 consumers and office workers on AI.

Thill said that takeaways from the survey include that Google leads in consumer mindshare for AI prowess, and more consumers prefer Google's AI-powered search answers than traditional results.

In addition, the survey found not a lot of "AI killer apps" are out there yet; consumers' willingness to pay for AI is low; and OpenAi is most used among workers, but Google is not far behind, the analyst said.

Now before we leave you, let's ask AI Tony Soprano one last thing.

"When was George Washington born?"

Tony rolled his eyes at the question.

"Jesus, you're pushin' it now," he said. "But fine, I'll indulge you. Washington was born on February 22, 1732. You want more useless trivia, or are you gonna tell me what you really want?"

Related: Veteran fund manager picks favorite stocks for 2024

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.