Google infuses most personalized AI assistant in market into phones: Jefferies
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Google (NASDAQ:GOOG)(NASDAQ:GOOGL) shares have seen no uplift despite unveiling its latest iteration of smartphones and accessories at yesterday’s Made by Google event, as the dark cloud of the U.S. Department of Justice looms.
“We don’t foresee a potential forced divestiture happening soon, but our sum-of-the-parts analysis indicates the market is seemingly assigning no value to Google Cloud and Hardware businesses,” said Jefferies analysts, led by Brent Thill, in a Wednesday investor note.
Google shares slipped 3% by noon trading.
“We believe that similar to Cloud, Google’s lack of preexisting market share in smartphones/devices makes gaining share an uphill battle, so Gen AI provides them an opportunity to narrow the gap,” Thill added.
Jefferies maintains its Buy rating on Google as it considers Gemini the most personalized generative AI assistant in the consumer market. Jefferies considers Google and Meta Platforms (META) as the best positioned companies to benefit from the consumer AI opportunity.
“It was noted that all six of Google’s apps, each with over 2B monthly active users, already have Gemini infused,” Thill said. “Google also noted that the Gemini assistant will be not exclusively for Google phones, but for all Android phones.”
“Hence, we are bullish on Gemini’s Assistant’s ability to access info across Gmail, Google calendar and more, supposing the users opt in,” he added.
Jefferies was surprised Google did not announce a new operating system, Android 15, at yesterday’s event. The new Pixel 9 line will launch with the Android 14.