Investing.com — Shares of Alphabet Inc Class A (NASDAQ:) have surged recently, outperforming those of Meta and Meta Platforms (NASDAQ:), as new developments in AI fuel investor optimism, a said BofA Securities. Shares of Google’s parent company have jumped nearly 9% since Dec. 9.
The brokerage cited recent launches such as Google’s AI video generator Veo 2, Gemini 2.0 and quantum computing chip Willow as key drivers of optimism, reaffirming the company’s leadership in video technology. AI.
Statcounter data showed a slight increase in Google’s global search share, helped by broader adoption of AI insights, signaling potential AI-led growth in 2024, BofA added.
Google’s Veo 2, trained on YouTube data, is said to outperform OpenAI’s Sora in fast joining and physics modeling, with unique features like 4K resolution and extended video durations. This innovation drives adoption by small and mid-sized advertisers on YouTube, supporting growth through 2025, the note said.
BofA also highlighted the possibility of cost-cutting measures under Alphabet’s new CFO in 2025 and noted that regulatory developments would be a near-term catalyst.
Google is expected to respond to a DOJ monopoly ruling with solutions, which could include changes to default placement agreements and a choice screen for Chrome users. However, final decisions may not come until 2027 due to ongoing appeals.
BofA reiterated its “buy” rating on Alphabet, citing the underappreciated benefits of AI and future opportunities in search, cloud and advertising.
