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Shares in Google parent Alphabet (GOOGL) fell below the key 50-day moving average on Monday as the internet giant grappled with the fallout from criticism of its “Gemini” artificial intelligence system. GOOGL stock is about break-even in 2024 with Monday’s retreat.
On the stock market today, Google stock slipped 3.9% to 138.30 in midday action, falling below the 50-day line. Alphabet was on track for its lowest close since early January.
Wedbush analyst Daniel Ives, in an email, called the Google sell-off on Monday “way overdone as Google has a massive opportunity on AI with the Street giving no credit. Gemini headwinds but we believe Google is one of the core winners in AI revolution.”
Investors have been digesting mixed news on the artificial intelligence front. “Generative” AI has emerged as a battleground versus Microsoft (MSFT), Facebook-parent Meta Platforms (META) and others.
Gemini’s Human Imagery Goes Astray
Google last week stopped allowing users of its Gemini chatbot technology to generate images of humans. The move came after Gemini users produced pictures of Black Founding Fathers in American history as well as other imagery.
Google admitted to issues with “inaccuracies in some historical depictions.” Also, Google didn’t say for how long it would be suspending the ability to generate human images.
Google is battling Microsoft, the biggest investor in OpenAI, to develop the best training models for AI systems. Generative AI can create text, images, sounds and video.
Competition has been pressuring Google to speed up the release of commercial AI products. Google debuted its Gemini AI training model on Dec. 6. Google announced the availability of Gemini 1.5, an improved AI training model, on Feb. 15.
The same week, The Information reported that OpenAI is developing its own web search product that would more directly compete with Google. OpenAI last week introduced new technology that uses AI to create high-quality videos from text descriptions.
Gemini Powers Advertising Tools
Despite some setbacks, Google has been gaining traction in some areas. In February, it launched new Performance Max advertising tools powered by Gemini. Performance Max ad tools automate buying across YouTube, internet search, display, Gmail, maps and other applications.
Also, Google aims to monetize subscription-based Gemini products.
Google plans to launch an “AI Premium” version of Google One office productivity tools. A consumer subscription plan that comes with 2 terabytes of storage will cost $19.99 monthly.
Also, Google’s relative strength line has been weakening since it reported fourth quarter earnings. Further, institutional ownership also has weakened.
GOOGL stock holds an Accumulation/Distribution Rating of D. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
Meanwhile, investors should watch whether Google can reclaim its 50-day line.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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