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DailyBubble News

Despite Its Recent AI Blunders, This “Magnificent Seven” Stock Is Still a Buy and Hold

This year, the tech world has been abuzz with the advancements in artificial intelligence (AI), with companies striving to develop the most efficient AI tools. Microsoft, now the world’s largest company by market capitalization, gained an early lead by supporting OpenAI, the creator of the ChatGPT large language model (LLM).

Following the release of ChatGPT-3 in late 2022, Alphabet (GOOG -0.75%, GOOGL -0.77%) found itself playing catch-up in the AI race. Google’s response was the launch of its LLM chatbot, Bard, integrated with Search. However, the debut of Bard did not go as planned, with inaccuracies causing disappointment among investors and a subsequent drop in Alphabet’s stock price.

Despite internal calls to delay Bard’s release due to its shortcomings, Google proceeded with the launch. However, Bard failed to gain the same level of popularity as its competitors, receiving only a fraction of the traffic garnered by ChatGPT-3. Subsequent rebranding as Gemini promised improvements, but issues with content accuracy led to a suspension of image generation, further impacting Alphabet’s stock performance.

Despite these setbacks, Alphabet remains a solid investment option. The company’s strong foundation in AI research and its dominant position in the search market provide a stable base for future innovations. Additionally, Alphabet’s financial performance reflects growth across various segments, including Google Cloud and YouTube advertising, showcasing its resilience amid AI challenges.

While Alphabet faces hurdles in the AI space, its financial strength and track record of innovation position it favorably for future success. DailyBubble sees Alphabet as a buy and a long-term hold, considering its ability to navigate AI challenges while maintaining growth in key business segments.

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