Alphabet (GOOGL) Adds Generative AI-Powered Features to Gmail

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alphabetGOOGL shares have risen 33.2% year to date, outperforming the Zacks Computer & Technology sector's 28.7% growth, and the company continues to benefit from the expansion of its generative AI capabilities that improve user experience.

Google, a division of Alphabet, recently introduced a Gemini-powered summary feature in Gmail for Android.

This generative AI-powered feature helps summarize long newsletters in Gmail. Users can also summarize conversations in Gmail using the “Summarize this email” option.

Alphabet is expected to gain a solid following among Android users who use Google Workspace thanks to this new feature.

Year-to-date performance

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Growing generative AI efforts support the outlook

In addition to its latest summarization capabilities, Google has also released Gemma 2, a lightweight open model available in 9 billion and 27 billion parameter sizes, aiming to accelerate AI adoption and innovation across enterprises.

Alphabet has expanded NotebookLM, its generative AI-powered note-taking app, which was previously only available in the US, to Australia, Brazil, Canada, India, the UK, and 208 other countries and regions.

Powered by Google's Gemini 1.5 Pro language model, NotebookLM helps you understand and reason about documents by focusing on their content, generating summaries, and suggesting follow-up questions.

Google also launched the YouTube Music Gemini Extension, which allows users to search for music and play radio with the help of an AI chatbot.

Gemini Pro also powers Android Studio's bots, allowing developers to ask coding-related questions and seamlessly integrate generative AI capabilities into their apps.

These efforts will position Alphabet to capitalize on the robust growth opportunities that exist in the generative AI market, which is expected to reach $36.06 billion in 2024 and $35.61 million in 2030, growing at a CAGR of 46.5% between 2024 and 2030, according to a Statista report.

Alphabet currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Competitive Advantages in the Field of Generative AI

Alphabet's growing generative AI capabilities will give it a competitive edge over its peers, including: Microsoft MSFT, Adobe ADBE and Amazon AMZN is also making a concerted effort to strengthen its foothold in the generative AI space.

GOOGL shares have outperformed MSFT and AMZN's 23% and 30% returns, respectively, year to date. ADBE shares are down 4.4% in the same period.

Microsoft’s move to enhance its generative AI capabilities by integrating GPT-4 into Bing and Edge and providing a ChatGPT-like user experience remains noteworthy.

Meanwhile, Adobe is capitalizing on the success of its family of creative generative AI models, Firefly. The company recently integrated Firefly-powered generative fill, background removal, erase and cut out features into Acrobat, designed to let customers edit images directly within PDFs.

Meanwhile, Amazon is benefiting from the solid adoption of Amazon Bedrock, which gives seamless access to high-performance underlying models from AI companies through APIs.


Alphabet's growing generative AI capabilities, combined with its strong competitive position, are key drivers of its long-term growth prospects.

Additionally, the company's strong cloud division, growing momentum across Google's mobile search, and increased demand for its Android, search, and YouTube services are also positive factors.

We expect these factors to continue to drive our overall financial performance in the foreseeable future.

The Zacks Consensus Estimate for total revenues in 2024 is $291.26 billion, representing year-over-year growth of 13.6%.

The consensus estimate for earnings in 2024 is $7.60 per share, indicating a 31.03% increase from last year. This figure has been revised upward by 0.4% over the past 60 days.

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