Why Alphabet Stock Popped Today
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Google just made a big advance in consumer AI -- but will it help the stock?
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July 9, 2025
03:34 PM
The Motley Fool
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Google just made a big advance in consumer AI -- but will it help the stock
Alphabet (GOOG 1. 46%) (GOOGL 1. 34%) stock advanced in artificial intelligence (AI) today, announcing that the company's Gemini personal AI assistant software is coming soon to a smartwatch near you
Alphabet stock jumped 3% on the news initially, before retreating to something more a 1. 2% gain as of 2:45 p
Time for AI investors to "watch" Google Alphabet broke its big news on Google Blog, explaining that "Wear OS watches, including those from Pixel, Samsung, OPPO, OnePlus and Xiaomi," can access Gemini AI directly starting today (although the full rollout may take "weeks")
With the touch of a button and a command mpt "Hey, Google 2," users can ask Gemini questions right on their wristwatches
Alphabet confirms Gemini will be able to access users' other Google services, such as Gmail and Google Calendar, as well
Is Alphabet stock a buy
This is a pretty great innovation, albeit I'm not 100% on how voice-controlled AI will help sell more ads and grow revenue and fit for Alphabet
It might help Alphabet sell more devices, especially Pixel smartphones, or it might not
Pixels still haven't really caught on much, and if Gemini is also available on Samsung smartwatches, this might not help Alphabet's Pixel much after all
My biggest concern here is that even if Alphabet imves its competitive position in AI, putting Gemini on more Google users' wrists won't necessarily offset the enormous capital investments Alphabet is sinking into AI -- investments that cost the company $57. 7 billion (in capital expenditures) out of the $132. 6 billion (in operating cash flow) it brought in over the past year
At a price-to-free-cash-flow ratio of more than 28, with a long-term growth rate of less than 15%, Alphabet stock still seems too expensive to buy
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors
Rich Smith has no position in any of the stocks mentioned
The Motley Fool has positions in and recommends Alphabet
The Motley Fool has a disclosure policy.
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