Alphabet Inc (NASDAQ:GOOG) shares have gained about 9% over the past week after the tech giant unveiled its latest artificial intelligence (AI) tools at a developer’s conference, defying early doubters of the company’s technology.
After lagging the stock price performances of peers such as Apple Inc (NASDAQ:AAPL) and Microsoft Corp earlier in the year, Alphabet’s Class A shares have gained 11% over the past month and 32% year to date to its current price of $117.74.
On Monday, Bill Ackman’s Pershing Square disclosed the purchase of more than 10 million of Alphabet’s Class A and Class C shares in the first quarter, worth about $1.2 billion at current prices.
Even after its recent rally, Alphabet stock isn’t expensive relative to peers, according to a Bloomberg report, noting that at 19 times, the stock’s price-to-projected profit ratio is the highest in months, yet it’s still much cheaper than Microsoft and Apple, which are priced at 29 and 27 times, respectively.
If the company can successfully integrate the new AI features to its products that serve hundreds of millions of people, it should “build further confidence in AI driven upside to come,” Morgan Stanley (NYSE:MS) analyst Brian Nowak wrote in a research note after the developer’s conference.
Alphabet’s AI tools announcement described a more conversational search engine, which makes its AI-powered chatbot more broadly available.
Contact Sean at sean@proactiveinvestors.com