CA - AI Race Google Is By Far A Much Better Investment Than Meta
2024-05-29 20:49:36 ET
Summary
- Google recently announced incredible new AI capabilities, including its personalized agent-like service named “Project Astra”, which opens up new and promising monetization opportunities.
- Meta is also moving in the agentic direction as its AI model evolves, with incredible deployment opportunities through its popular communication apps like WhatsApp and Instagram/ Facebook Messenger.
- While Meta stock is trading at a cheaper valuation multiple, Google is still the better investment.
The two advertising giants, Alphabet ( GOOG )(GOOG:CA) and Meta ( META )(META:CA), are in a tight race to build versatile AI models and effectively deploy them across their platforms, in order to keep users engaged and the ad dollars flowing. Meta has been trumpeting the capabilities of its latest Llama 3 model, while Google recently introduced the powerful Gemini 1.5 Pro model. Both tech behemoths boast massive user bases that allow for wide-scale distribution of their models. Although only one is worth buying, and that is Alphabet stock.
In the previous article about Google, we covered how Google Cloud is becoming more profitable . In a simplified manner, I delved into specific technical concepts like “compute-optimal scaling” that has enabled Alphabet to train and deploy its models more cost-efficiently, conducive to widening profit margins for its cloud segment. Now aside from Google Cloud, these strategies also enable the tech giant to serve generative AI-powered searches more cost-efficiently. In this article, we will be covering how well-positioned Google is in monetizing the broader rollout of Gemini across its suite of consumer apps, in comparison to chief rival Meta’s rollout of new generative AI features across its social media apps.
Google moving ahead of Meta in terms of monetization
At the recent Google I/O event, Google revealed the roll out of AI Overviews in Google Search to all U.S. users, and that the company would roll it out to other countries more broadly over the coming months, to about 1 billion users by the end of the year. It will be powered by a custom Gemini model that is specifically tailored for Google Search.
On the Q1 2024 Google earnings call , CEO Sundar Pichai had shared that:
AI Race, Google Is By Far A Much Better Investment Than MetaWe have already served billions of queries with our generative AI features. It's enabling people to access new information, to ask questions in new ways, and to ask more complex questions. Most notably, based on our testing, we are encouraged that we are seeing an increase in Search usage among people who use the new AI overviews as well as increased user satisfaction with the results.