With the AI arms race getting hotter by the day, figuring out which horse to back proves a consuming endeavor for investors. Analysts at Bank of America, meanwhile, seem to have a horse in mind: Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL). Investors agree, if to a more limited extent, as Alphabet is up slightly in Monday afternoon’s trading.
Justin Post, a Bank of America analyst, revealed that Alphabet has a few key advantages in the AI space. These are advantages that even Microsoft (NASDAQ:MSFT) isn’t able to fully replicate. Granted, ChatGPT’s daily traffic is still on the rise, and people are still actively searching out ChatGPT and related topics. Microsoft integrating ChatGPT into Bing is definitely a point in its favor, but Alphabet isn’t licked yet. Alphabet’s own download activity remains unimpacted, even as Microsoft’s Bing downloads climb. Plus, Alphabet also has a big head start in the AI arena.
While Microsoft’s AI advances have certainly been strong, they’ve also suffered some embarrassing missteps out of the gate. Watching Microsoft’s chatbot occasionally threaten its users, as well as make perplexing statements about wanting to be alive, has likely left a few scars on users who are afraid that this is, in fact, how you get Skynet. Thus, Alphabet has an opportunity to present itself as a safer, saner alternative. That may be enough to push it forward.
Alphabet enjoys plenty of analyst support as well, not only from Justin Post. Currently, analyst sentiment is unanimous, making Alphabet stock a Strong Buy. Plus, it has 37.94% upside potential thanks to its average price target of $124.60 per share.
