Alphabet’s GOOGL Google introduced Duet AI to Google Slides and Drawing, bolstering its Google Workspace offerings with generative AI.
With this new integration, Google now offers the ability to remove the background of images in Slides and Drawings by right-clicking on the image after Crop, Replace and Reset.
This new “Remove background” feature can be accessed from the toolbar or Format menu.
Alphabet is expected to gain solid traction across various enterprises on the back of its latest move.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Strengthening Google Workspace With Duet AI
The company has made numerous efforts to enhance its Google Workspace services by integrating generative AI into the Workspace environment.
Notably, Google integrated Duet AI's "Help me write" feature in Gmail for Android and iOS, allowing users to refine their messages, including Formalize, Elaborate, Shorten, Write a draft and to return the prompt field.
Further, Google Docs rolled out a paid "Proofread" feature powered by AI to replace current spelling and grammar checks. It offers suggestions for conciseness, active voice, dynamic wording and sentence splitting.
Additionally, Google introduced several Duet AI features to Google Meet, including custom backgrounds, note-taking, action item creation and video snippets. The AI can create action items and notes, with the ability to pause note-taking at any time. These notes can be saved to Google Docs and sent to attendees.
We believe that all the above-mentioned endeavors will likely strengthen Google Workspace offerings, which, in turn, will boost its Google Cloud segment.
Notably, Google Cloud, which has become an integral part of Alphabet, reported revenues of $8.41 billion in the third quarter of 2023. The figure accounted for 10.9% of the quarter’s total revenues and exhibited year-over-year growth of 22.5%.
Our model projects fourth-quarter 2023 Google Cloud revenues to be $8.65 billion, indicating year-over-year growth of 18.3%.
Growth Prospects & Competitive Scenario
Alphabet’s AI-optimized infrastructure and expanding Duet AI offerings will aid it in strengthening its position in the global generative AI space.
Per an Allied Market Research report, the global generative AI market is expected to reach $191.8 billion by 2032, witnessing a CAGR of 34.1% between 2023 and 2032.
Strength in the promising generative AI market will likely strengthen Alphabet’s overall financial performance in the upcoming period and instill investor optimism in the stock.
Our model estimate for fourth-quarter 2023 total revenues is pegged at $81.95 billion, indicating year-over-year growth of 7.8%.
Alphabet has gained 56.8% on a year-to-date basis compared with the industry’s growth of 56.3%.
Moreover, growing Duet AI capabilities position Alphabet well to compete with Microsoft MSFT, which is riding on the success of a similar software called Copilot.
Notably, Microsoft 365 Copilot is an AI assistant built on Bing Chat Enterprise, offering enterprise-grade security, privacy, compliance and responsible AI. It solves complex work problems by analyzing emails, meetings, chats, documents and the web, and is integrated into Microsoft 365 Apps like Word, Excel, PowerPoint, Outlook and Teams.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Flex FLEX and Badger Meter BMI. While Flex sports a Zacks Rank #1 (Strong Buy) at present, Badger Meter carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Flex have gained 40.1% in the year-to-date period. FLEX’s long-term earnings growth rate is currently projected at 12.39%.
Shares of Badger Meter have gained 39.7% in the year-to-date period. BMI’s long-term earnings growth rate is currently projected at 20.39%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
