Alphabet Shares Rise 4% on AI Updates and Launch of AI Mode for Google Search
Alphabet (GOOGL.O) saw its shares jump 4%, marking the second consecutive day of gains, as investors responded positively to the company's updates related to artificial intelligence, as reported by Reuters.
The surge followed the announcement of the rollout of "AI Mode" to all US users, as well as a $249.99-a-month subscription option for AI power users, a development first teased at Alphabet's annual developer conference.
These announcements helped alleviate concerns about how the company would fund its large-scale AI development projects. Following the conference, Citi analyst Ronald Josey expressed increased confidence in Alphabet's ability to continue driving search growth while ramping up monetization, citing improving execution.
Also read: Alphabet’s AI Strategy Drives Strong Q1 Performance
Alphabet has rolled out "AI Mode" for Google Search across the US, offering users more tailored and relevant results powered by advanced AI, as it competes with rising AI chatbot usage. Alongside this, the company launched a $249.99/month subscription service for AI power users to help fund its AI initiatives and expand revenue.
Alphabet also hinted at monetizing AI Mode through more targeted advertising. Following the announcements, its Class C shares climbed 4% to $175.27, though still down around 7% year-to-date.
According to Reuters, Citi analyst Ronald Josey believes that Alphabet's monetization of AI Mode could soon follow the US launch, which would drive further growth for the company. The successful integration of AI into Google Search could create new opportunities to capitalize on the growing demand for AI-powered services, while maintaining strong advertising revenues.
