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Is Google or Microsoft the Better AI Stock to Purchase Right Now?

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Is Google or Microsoft the Better AI Stock to Purchase Right Now

With the release of ChatGPT’s current version in late 2022, OpenAI sparked increased investor interest in all things artificial intelligence (AI). Since then, two companies that have emerged as leaders in artificial intelligence (AI)—Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG)—have defined the field and its uses. Microsoft and OpenAI are strong partners, and shortly after the release of ChatGPT, Alphabet unveiled Bard, their response to the chatbot.

Both Alphabet and Microsoft released Bard, their AI-powered Bing Chat, and they both released their October–December quarter earnings reports almost a year ago. On hearing the news, investors dumped both stocks, raising the possibility that the AI stock frenzy was overblown. Nevertheless, both businesses had strong results.

Examining each company’s most recent report, let’s determine which is the best AI stock to purchase right now.

Microsoft Reports Gains Across the Board

Microsoft’s profits demonstrate why the corporation recently overtook Apple as the most valuable company in the world. In fairness, the enterprise software company’s earnings from the previous quarter have slightly improved as a result of the closing of its acquisition of Activision Blizzard in October.

Microsoft’s fiscal 2024 second-quarter sales of $62 billion exceeded analyst projections of $61.14 billion, an 18% year-over-year increase. Operating income increased by 33% on an annual basis, or by 25% when measured against non-GAAP (generally accepted accounting principles). In terms of financial performance, profits per share (EPS) increased to $2.93, or 33% on an annual basis or 26% on a non-GAAP basis. That, too, exceeded projections.

Microsoft’s cloud business was once again a strength of the corporation; Azure revenue increased by 30% and its intelligent cloud segment rose by 20% annually. Bing Chat’s revenue growth from search and news advertising was just 8% year over year, which suggests that the company’s expectations were not met.

After hours, Microsoft ended the day with a 0.3% decrease.

Alphabet Performs Poorly on a Crucial Metric

Overall, Alphabet’s fourth-quarter fiscal 2023 report was strong as the business continues to bounce back from the downturn in the digital ad sector. After-hours trading saw a 6% decline in the stock price due to the revenue’s 13% year-over-year increase to $86.3 billion, which was higher than the consensus estimate of $85.3 billion. However, the ad revenue of $65.5 billion fell short of expectations.

The less-than-expected increase in ad revenue appeared to suggest that either Alphabet was losing market share to rivals or that AI hasn’t yet had a big enough influence on ad spending.

EPS increased from $1.05 to $1.64 on the bottom line as a result of a $2 billion improvement in equity securities. To $23.7 billion, operating income increased by 30%.

The ongoing instability in Google Network, whose revenue dropped once more, contributed to an 11% increase in ad revenue to $65.5 billion. Its second highly watched business area, Google Cloud, had a 26% growth to $9.2 billion and an operating income of $864 million, compared to a $186 million loss in the same quarter last year.

The Side-By-Side Analysis

Last year, the stock prices of Microsoft and Alphabet both experienced significant growth, and in the most recent quarter, both companies reported comparable increases in their top and bottom lines. When it comes to AI tactics, Microsoft seems to have the upper hand between the two firms.

The Office 365 suite, Azure, Bing, Github, and Azure are just a few of the products that the corporation has integrated its AI-powered Copilot into. Additionally, according to Microsoft management, AI was responsible for six percentage points of Azure revenue growth, or a rise from 24% to 30%. This is a noteworthy development that is probably going to get better.

Ultimately, Microsoft appears to have been better equipped for the AI revolution than Alphabet, as evidenced by its acquisition of Github, which integrated effectively with its AI Copilot tools, and its revolutionary investment in OpenAI.

Conversely, Alphabet only integrated Google Brain this year, despite having bought DeepMind, an AI research center, some years earlier. With regard to AI conversation, the parent company of Google has the technology to launch its own chatbot, but it chose to allow OpenAI and ChatGPT take the lead.

Why Microsoft is a superior option for buying AI stock

While Alphabet is not averse to artificial intelligence, the parent company of Google does not have the applications or strategy necessary to properly capitalize on generative AI, unlike Microsoft.

Conversely, Microsoft has made preparations for this eventuality and has taken calculated chances, such as forming an alliance with OpenAI. In addition, its product portfolio is substantially more varied than Alphabet’s, which derives the majority of its revenue from advertisements and hasn’t appeared to gain much from AI thus far.

Although Microsoft stock costs more than Alphabet stock does, it is the superior AI stock in this case. With the new technology, its long-term prospects remain far more hopeful.

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AI Features of the Google Pixel 8a Leaked before the Device’s Planned Release

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A new smartphone from Google is anticipated to be unveiled during its May 14–15 I/O conference. The forthcoming device, dubbed Pixel 8a, will be a more subdued version of the Pixel 8. Despite being frequently spotted online, the smartphone has not yet received any official announcements from the company. A promotional video that was leaked is showcasing the AI features of the Pixel 8a, just weeks before its much-anticipated release. Furthermore, internet leaks have disclosed software support and special features.

Tipster Steve Hemmerstoffer obtained a promotional video for the Pixel 8a through MySmartPrice. The forthcoming smartphone is anticipated to include certain Pixel-only features, some of which are demonstrated in the video. As per the video, the Pixel 8a will support Google’s Best Take feature, which substitutes faces from multiple group photos or burst photos to “replace” faces that have their eyes closed or display undesirable expressions.

There will be support for Circle to Search on the Pixel 8a, a feature that is presently present on some Pixel and Samsung Galaxy smartphones. Additionally, the leaked video implies that the smartphone will come equipped with Google’s Audio Magic Eraser, an artificial intelligence (AI) tool for eliminating unwanted background noise from recorded videos. In addition, as shown in the video, the Pixel 8a will support live translation during voice calls.

The phone will have “seven years of security updates” and the Tensor G3 chip, according to the leaked teasers. It’s unclear, though, if the phone will get the same amount of Android OS updates as the more expensive Pixel 8 series phones that have the same processor. In the days preceding its planned May 14 launch, the company is anticipated to disclose additional information about the device.

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Apple Unveils a new Artificial Intelligence Model Compatible with Laptops and Phones

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All of the major tech companies, with the exception of Apple, have made their generative AI models available for use in commercial settings. The business is, nevertheless, actively engaged in that area. Wednesday saw the release of Open-source Efficient Language Models (OpenELM), a collection of four incredibly compact language models—the Hugging Face model library—by its researchers. According to the company, OpenELM works incredibly well for text-related tasks like composing emails. The models are now ready for development and the company has maintained them as open source.

In comparison to models from other tech giants like Microsoft and Google, the model is extremely small, as previously mentioned. 270 million, 450 million, 1.1 billion, and 3 billion parameters are present in Apple’s latest models. On the other hand, Google’s Gemma model has 2 billion parameters, whereas Microsoft’s Phi-3 model has 3.8 billion. Minimal versions are compatible with phones and laptops and require less power to operate.

Apple CEO Tim Cook made a hint in February about the impending release of generative AI features on Apple products. He said that Apple has been working on this project for a long time. About the details of the AI features, there is, however, no more information available.

Apple, meanwhile, has declared that it will hold a press conference to introduce a few new items this month. Media invites to the “special Apple Event” on May 7 at 7 AM PT (7:30 PM IST) have already begun to arrive from the company. The invite’s image, which shows an Apple Pencil, suggests that the event will primarily focus on iPads.

It seems that Apple will host the event entirely online, following in the footsteps of October’s “Scary Fast” event. It is implied in every invitation that Apple has sent out that viewers will be able to watch the event online. Invitations for a live event have not yet been distributed.
Apple has released other AI models before this one. The business previously released the MGIE image editing model, which enables users to edit photos using prompts.

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Google Expands the Availability of AI Support with Gemini AI to Android 10 and 11

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Android 10 and 11 are now compatible with Google’s Gemini AI, which was previously limited to Android 12 and above. As noted by 9to5google, this modification greatly expands the pool of users who can take advantage of AI-powered support for their tablets and smartphones.

Due to a recent app update, Google has lowered the minimum requirement for Gemini, which now makes its advanced AI features accessible to a wider range of users. Previously, Gemini required Android 12 or later to function. The AI assistant can now be installed and used on Android 10 devices thanks to the updated Gemini app, version v1.0.626720042, which can be downloaded from the Google Play Store.

This expansion, which shows Google’s goal to make AI technology more inclusive, was first mentioned by Sumanta Das on X and then further highlighted by Artem Russakoviskii. Only the most recent versions of Android were compatible with Gemini when it was first released earlier this year. Google’s latest update demonstrates the company’s dedication to expanding the user base for its AI technology.

Gemini is now fully operational after updating the Google app and Play Services, according to testers using Android 10 devices. Tests conducted on an Android 10 Google Pixel revealed that Gemini functions seamlessly and a user experience akin to that of more recent models.

Because users with older Android devices will now have access to the same AI capabilities as those with more recent models, the wider compatibility has important implications for them. Expanding Gemini’s support further demonstrates Google’s dedication to making advanced AI accessible to a larger segment of the Android user base.

Users of Android 10 and 11 can now access Gemini, and they can anticipate regular updates and new features. This action marks a significant turning point in Google’s AI development and opens the door for future functional and accessibility enhancements, improving everyone’s Android experience.

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