Why Alphabet's stock is soaring and Google is still king

The Story

Have you ever heard of ChatGPT? It's a new AI language model that's been making headlines lately. It's said to be the largest model of its kind, with 175 billion parameters, which is more than ten times the size of its predecessor, GPT-3. It's an impressive feat of technology, but some people are worried about what it could mean for Google.

Alphabet, the parent company of Google, saw its stock rise by more than 4% after Bank of America Securities upgraded the stock to a Buy rating, citing the company's strong earnings growth and potential upside. This is despite the fact that ChatGPT has been getting a lot of buzz lately, with some people claiming that it could be a threat to Google's dominance in the tech world.

So, why is Alphabet's stock soaring while some people are worried about Google's future? Let's take a closer look.

The Numbers

First, let's look at some quantifiable examples. Alphabet's Q2 2021 earnings report showed revenues of $61.9 billion, up 62% year over year. Net income was $18.5 billion, compared to $6.96 billion in Q2 2020. Google's advertising business, which accounts for the bulk of the company's revenues, saw revenues of $57.1 billion, up 69% from the same quarter last year.

These numbers show that Google is still the king when it comes to online advertising. Despite the buzz around ChatGPT and other AI language models, Google's ad business is still growing at an impressive rate. In fact, Google's Q2 advertising revenue was the highest it's ever been.

But it's not just the advertising business that's doing well. Google Cloud, which includes the company's infrastructure services, platform services, and G Suite (now called Google Workspace), saw revenues of $4.6 billion, up 53% year over year. This is a clear indication that Google is making strides in the cloud computing space, which is a highly competitive market.

The Conclusion

So, what can we conclude from all this? Here are three points to consider:

• Google is still the dominant player in online advertising. Despite the buzz around ChatGPT and other AI language models, Google's ad business is growing at an impressive rate.
• Google is making strides in the cloud computing space. Google Cloud's revenue growth is a clear indication that the company is competing well with other cloud providers.
• Alphabet has a lot of potential upside. Bank of America's upgrade to a Buy rating shows that the company's strong earnings growth is enticing to investors.