Alphabet's integration of AI technologies poses risks, primarily that chatbots might reduce search traffic to Google. Alphabet relies heavily on ad revenue.
Sundar Pichai remarked on the importance of strategic investment in AI, noting, "the risk of underinvesting is dramatically greater than the risk of overinvesting for us."
Given the heavy dependence of Alphabet on advertisement revenue, economic fluctuations or increased competition could lead to significant volatility in its earnings.
Comparatively, Advanced Micro Devices (AMD) has a simpler business model and is viewed as having better growth prospects in the current AI-driven market.
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