Wednesday, July 12, 2023

Alphabet GOOGL Lagging Nasdaq 100

In early June Alphabet (GOOGL) started to diverge from the Nasdaq. Stocks like Microsoft (MSFT) and even Snapchat (SNAP) have continued to move higher.

There wasn't any major negative news for GOOGL but there wasn't comparative good news that keeps coming out for Microsoft. Microsoft Bing is a bit of a hub now with improved interface and AI image generator and ChatGPT-4 in creative mode that comes close to OpenAI on many things and equal to it on others.

Inflection AI had big news hit too about their $1.3 billion new investment. Inflection AI is working on LLMs similar to OpenAI's.

I think the market is just simply pricing in more future competition for Google. Over recent months Elon Musk was hinting at his own AI company too. They just officially announced X.AI today. I think that was getting priced into Alphabet stock too.

GOOGL stock price vs nasdaq

There are so many big players in consumer generative AI now. GOOGL doesn't deserve a monopoly valuation anymore with AI potentially disrupting much of our current notions of consumer tech and especially web searching. It won't happen overnight but as the mainstream starts using AI assistants more and more there will be slow shifts in behavior. I suspect whenever Apple launches a serious cutting edge AI assistant that will be a turning point. Elon Musk recently increased video uploads to 2 hours with up to 8GB file size capability for Twitter video uploads. Twitter with X Corp may be looking to seriously compete with Youtube. I added more puts on the move up today. I put on the August 4th $100 strike puts.

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