Why Amazon and Alphabet Are Poised to Soar: AI Innovations and Undervalued Potential
Amazon and Alphabet's big AI bets
First, I'd like to point out that Amazon and Alphabet have plenty of irons in the artificial intelligence (AI) fires. They may not be as deeply and directly involved in the frenzy for generative AI and large language models (LLMs) as Nvidia (NASDAQ: NVDA), but you're looking at two of the leading providers of cloud-based computing services.
- Google Cloud and Amazon Web Services play significant roles in the back-end of everyone else's AI ambitions, crunching the required numbers in their global data center networks.
- They also offer their own AI tools, led by the ChatGPT-like Google Gemini platform and the Amazon Lex chatbot. You may not be familiar with Lex, but it's basically the same technology that powers Amazon Alexa, made available for any developer in need of a conversationsl natural language system.
- How committed to AI innovation are Google and Amazon? Well, both companies use the latest and greatest AI acceleration hardware from Nvidia and Advanced Micro Devices (NASDAQ: AMD), but that's not all. The Cloud TPU and AWS Inferentia chips are proprietary AI accelerator chips designed by Google's and Amazon's own engineers, respectively.
Why Amazon and Alphabet aren't skyrocketing (yet)
Of course, Wall Street had its reasons to keep Alphabet and Amazon under wraps while most of their 'Magnificent Seven' peers soared. The digital advertising market fell into a deep recession in 2022. Inflationary pressure is no joke -- consumers held on to their wallets with both hands while everybody's cost of doing business rose. The same market reality also held back Amazon's retail sales.
Amazon and Alphabet, with their undaunted investments in AI and cloud computing, are not just surviving the storm but blazing their own paths through it.The key takeaway? Investors should try to tune out the market noise and focus on the fundamentals. These tech giants look undervalued today, but that doesn't mean you should consider selling your shares to find better alternatives.
Should you invest $1,000 in Alphabet right now?
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This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.