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Why Alphabet Stock Got Rocked Today


As a stock, Google parent Alphabet (GOOG -2.02%) (GOOGL -1.96%) has had many good days; alas, Monday wasn’t one of them. The prices of both the tech giant’s listed shares fell by around 2% on the day, notably steeper than the 0.5% fall of the S&P 500 index. Investors were discouraged by the postponement of a potentially important product from their company.

Next-generation AI model Gemini apparently delayed

As reported in tech industry site The Information and disseminated by other media outlets, Google has postponed the launch of its next-generation artificial intelligence (AI) model Gemini. The service was originally slated to be unveiled next week at a series of events, but this introduction has been rescheduled for early next year. Details about the future date and time were not provided.

What was offered was the reasoning behind the delay; apparently there are concerns withing the company that Gemini didn’t perform as well as expected when fed certain inputs not written in English.

Gemini is an eagerly awaited product. According to industry scuttlebutt, it notably outperforms the consumer AI app of the moment, OpenAI’s ChatGPT. It also apparently represents a significant step up from Bard, Google’s current AI offering.

Alphabet has not yet officially commented on the reports about Gemini. Last month, the company’s CEO Sundar Pichai was quoted as saying that it was “focused on getting Gemini 1.0 out as soon as possible, make sure it’s competitive, state of the art, and we’ll build from there on.”

Few prizes for runners-up

In for a dime, in for a dollar. A clutch of tech powerhouses such as Alphabet (and Microsoft, which has pumped billions of dollars of investment into OpenAI) have dived headfirst into AI, and investors are expecting their solutions to perform well.

No one likes a postponement, especially in the fast-developing world of AI where laggards can trail far behind quickly. Hopefully for Alphabet and its shareholders, the apparent delay isn’t a sign of deep and intractable problems with Gemini.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool has a disclosure policy.



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