Although 2023 has marked the rise of many artificial intelligence (AI) stocks, 2024 will be an even bigger year. 2023 was filled with product announcements, but we haven't come close to seeing what these innovations can do. It will also expose many AI-related investments propped up on a lot of hype. Those are stocks to avoid.
Alphabet is the parent company of many well-known brands like Google, YouTube, and the Android operating system. While CEO Sundar Pichai has long declared Alphabet an AI-first company, its primary revenue stream is advertising. In the third quarter, 78% of revenue came from advertising. Advertising wasn't at its peak over the past few years, as many businesses were preparing for a recession and dialed back spending. But for the first time in several quarters, Alphabet's advertising wing had a solid quarter, growing revenue by 9%. This bodes well for 2024, as advertising still steers Alphabet.
Mentioning AI, Alphabet's Gemini was recently released and is the first model to surpass human experts in the massive multitask language understanding test, a popular way to measure an AI model's effectiveness. With its best-in-class performance (it beat OpenAI's GPT-4 model in many head-to-head competitions), Gemini should be a huge revenue boost for Alphabet as it's adopted.
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