Peter Smith
Alphabet Inc. (GOOG) is under investigation by Irish authorities for its AI model, PaLM 2, while analysts maintain bullish projections for the stock.
Alphabet Inc. (GOOG) Under Investigation in Ireland
Alphabet Inc. (NASDAQ: GOOG), Google's parent company, is facing a cross-border inquiry initiated by Irish data protection authorities. The investigation centers around Google’s compliance with EU data privacy laws while developing its artificial intelligence (AI) model, Pathways Language Model 2 (PaLM 2). The probe will focus on whether the tech giant adhered to European Union obligations before processing the personal data of EU citizens. This is not the first time the Irish government has scrutinized major tech companies, having previously investigated the social media platform X (formerly Twitter).
The PaLM 2 AI model is a core component of Google’s AI initiatives. This foundational model plays a significant role in Google's AI strategy, raising concerns about data privacy and compliance with EU regulations. With increasing focus on AI developments and data security, Ireland's investigation could significantly impact Google’s future AI projects in Europe.
Wall Street Analysts Maintain Bullish Outlook on GOOG
Despite the investigation, Alphabet Inc. (GOOG) continues to receive positive attention from Wall Street analysts. Stifel analyst Mark Kelley recently raised the stock’s price target to $199, up from $196, while reiterating a Buy rating. Kelley highlighted Alphabet's strong performance in its Search and Cloud segments, noting that YouTube's growth had slowed compared to Q1. During its latest earnings call, he also praised the company's encouraging AI commentary.
According to recent analyst ratings and news, Alphabet Inc. (GOOG) ranks 5th on the list of trending AI stocks. Although Alphabet is recognized for its leadership in AI, some analysts argue that other AI companies may offer higher returns over a shorter time horizon. Investors interested in AI stocks trading at a lower price-to-earnings ratio may find better opportunities elsewhere.
Conclusion
While Alphabet Inc. (GOOG) faces regulatory scrutiny in Europe, its AI endeavors and strong performance in its core business segments keep investors optimistic. The outcome of the Irish investigation will be closely monitored, as it could influence Google’s operations in the EU. However, the stock remains a top pick for AI-focused investors, supported by positive analyst forecasts.
Peter Smith
