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Google and YouTube parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) encountered a bumpy ride upon entering the artificial intelligence chatbot wars with Bard. Fast forward to today, the GOOG stock outlook seems promising as Alphabet unveils a new AI chatbot with a subscription plan.
Despite this positive development, concerns may arise among investors due to an insider’s recent sale of Alphabet stock and the company’s layoffs at YouTube. So, let’s dig into these issues.
Insider Trading: CEO’s Stock Sale
Here’s the lowdown. Reportedly, Alphabet CEO Sundar Pichai sold 22,500 GOOG/GOOGL stock shares on Feb. 7. Additionally, Pichai has offloaded 90,000 Alphabet shares over the past year and hasn’t bought any shares of his company.
The motive behind the CEO’s stock sale is not crystal clear. It doesn’t necessarily signify a lack of faith in the company. Corporate insiders sometimes opt to reap profits or rebalance their portfolios.
The YouTube layoffs, trimming the workforce by 100 employees in mid-January, should not cause undue disruptions, given YouTube’s global headcount of 7,173. While pivotal, these events are not likely to be deal-breakers for investors. More notably, Alphabet’s new collaboration with Pinterest (NYSE:PINS) for advertising should capture investors’ attention.
Pinterest CEO Bill Ready stated, “This partnership will focus on monetizing several of our currently unmonetized international markets by enabling ads to be served on Pinterest via Google’s Ad Manager.” Ready’s aim is to explore monetization prospects outside the U.S. borders for Pinterest. This partnership might emerge as a significant revenue stream for Alphabet.
Alphabet’s Move in AI Chatbot Wars
In the early stages of the AI chatbot wars, Bard posed challenges for Alphabet. However, a new chapter unfolds as Gemini replaces Bard, introducing an advanced version called Gemini Advanced.
For $19.95 per month, U.S. customers can access Gemini Advanced and its potent Ultra 1.0 AI model. They will also receive two terabytes of Google Cloud storage with the Google One AI Premium plan (a prerequisite for accessing Gemini Advanced).
In addition, U.S. customers are purportedly on the brink of gaining access to Gemini in Gmail and Google’s productivity suite. This move appears to be a potential game-changer as Alphabet endeavors to catch up with its rival, Microsoft (NASDAQ:MSFT), which made substantial investments in OpenAI’s ChatGPT chatbot technology.
Alphabet is unlikely to concede victory to Microsoft in the AI chatbot wars. The new deal with Pinterest underscores a considerable revenue opportunity.
Hence, fretting over the Alphabet CEO’s share sale or the YouTube layoffs seems unwarranted. In the broader context, these are mere blips on the radar. Investors should maintain an optimistic GOOG stock outlook and gradually build their positions with confidence.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
