According to Matt Orton, chief market strategist at Raymond James Investment Management, Alphabet is an underappreciated player in the artificial intelligence (AI) market and one of his top picks for 2024. While Nvidia has been a favorite among investors for AI, Orton believes that Alphabet’s potential in the industry has been overlooked by the broader market.
Orton specifically highlights the launch of Gemini, which Alphabet claims to be its largest and most capable AI model. Gemini offers advanced customer service engagement, trend identification for advertising, and even possibilities for content creation and productivity apps. Orton calls it a “game changer” and believes that it will help Alphabet tighten the gap in AI technology.
The strength of the U.S. consumer is another factor that Orton believes will contribute to Alphabet’s advertising revenue growth. He expects the company to continue expanding its margins and sees the current valuation as attractive compared to its peers.
Although Alphabet is one of the Magnificent Seven stocks that contributed to the S&P 500’s gains in 2023, its stock has experienced some recent dips, losing 0.88% in the past month and 2.8% since the beginning of the year. However, analysts covering Alphabet have given it an 83% buy rating, with a potential upside of 13.9% from the current average price target of $154.62, according to FactSet.
Orton advises caution, stating that he wouldn’t chase the stock at its current levels but would consider buying if there’s further downside. He emphasizes Alphabet’s high quality and fortress balance sheet, making it an appealing choice for investors looking for exposure to the AI market.
In conclusion, while Nvidia may have been the darling of AI investments, Alphabet’s potential in the sector should not be underestimated. With the launch of Gemini and its strategic position in the industry, Alphabet has the opportunity to emerge as a significant player in the AI market, making it a compelling investment option for the future.
The source of the article is from the blog qhubo.com.ni