Google partners with Vodafone for cloud, devices, and AI capabilities

From Nasdaq: 2024-10-09 11:40:00

Alphabet’s Google and Vodafone announced a 10-year partnership focusing on cloud, cybersecurity, and devices in Europe and Africa. Vodafone will gain access to Google’s Pixel devices and AI capabilities to enhance user experience and content search. Google will benefit from expanding its AI services and cloud offerings through this partnership.

Alphabet’s stock has risen by 10.6% in the past month, outperforming the Zacks Computer & Technology sector and Internet Services industry. It has also outperformed peers like Apple, Amazon, Microsoft, and Tesla. Earnings estimates for 2024 indicate strong growth for Alphabet, with revenues expected to increase by almost 14% year-over-year.

Google’s AI push with models like Gemini and GenAI is driving growth for Alphabet. The company offers versatile AI models for enterprises and developers, enhancing search engine capabilities with improved results and code completion tools. However, Alphabet faces regulatory challenges and increasing scrutiny over search engine dominance and data privacy issues.

The Department of Justice is considering measures to address Google’s alleged monopoly in the search market, including restrictions on Chrome, Play, and Android offerings. This move could impact Google’s search dominance and revenue-sharing agreements with companies like Apple and Samsung. Alphabet’s stock is currently considered overvalued, with a stretched valuation compared to industry peers.

Despite its strong AI capabilities and market dominance, Alphabet faces regulatory hurdles and competition in the cloud space. Investors should consider the risks associated with regulatory scrutiny and potential forced breakup scenarios. With a Zacks Rank of #3 (Hold), it may be advisable to wait for a better entry point before investing in Alphabet’s stock.



Read more at Nasdaq: Can Google’s Partnership With Vodafone Push the GOOGL Stock Higher?