Alphabet (NASDAQ:GOOGL)-owned Google is among the few tech giants going all-in on transformative AI (Artificial Intelligence) technology. According to a Reuters report, Google is considering a substantial investment in Character.AI. This company offers a chatbot service that enables users to generate characters and engage in conversations with them.
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Per the report, the AI startup is pursuing capital for training its models to meet increasing user demand. Google is considering providing funding to this AI through convertible notes. It’s worth mentioning that Character.AI has an existing partnership with Google. It utilizes Google’s cloud services and TPUs (Tensor Processing Units) for model training.
It’s important to highlight that Google invests in AI startups to bolster its AI capabilities and capitalize on growing demand. Earlier, the company committed to investing $2 billion in the OpenAI-rival firm Anthropic. With this background, let’s look at Street’s projection for GOOGL stock.
Is Alphabet a Buy or Sell?
Alphabet’s investments in AI startups align with its efforts to expand its share in the AI space and keep pace with peers like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). In September, Amazon announced a $4 billion investment in Anthropic to gain a minority ownership position in the company. Meanwhile, Microsoft’s Cloud division is registering solid growth, led by its AI capabilities.
Given the company’s efforts to strengthen its AI capabilities and integrate AI into its products, Wall Street analysts are optimistic about GOOGL’s prospects. The stock has 26 Buys and six Holds for a Moderate Buy consensus rating. Further, the average GOOGL stock price target of $152.67 implies 15.14% upside potential from current levels.
