Tech giant Alphabet (GOOGL) staged a meeting last night and, in reflection of the fact that it was on Halloween, did so in costume. But the news delivered during that meeting turned out to be scarier than any ghoul or specter might have been, and those at the meeting pushed for more information about planned cost cuts. The news was slightly more welcome to shareholders, though, who sent shares up fractionally in Friday morning’s trading.
Google recruiting vice president Brian Ong noted that the company is “…hiring less than we did a couple of years ago,” which reinforced the notion that at least some kind of cost cutting is going on within Alphabet’s walls. Ong further noted that “…you may see fewer roles available where you are” when asked about promotion opportunities. The notion was advanced still further by Anat Ashkenazi, current CFO, who noted plans to “push a little further” with cost-cutting measures.
25% of New Code at Google Is Generated by AI
Meanwhile, word from Sundar Pichai—who showed up for the conference call in a black T-shirt that read “Error 404 Costume Not Found”—offered up a disturbing note just days ago: over 25% of new code at Google is generated by artificial intelligence (AI). The code is subsequently checked by actual humans, Pichai noted, which should keep out anything harmful that could hurt the company’s operations.
But Pichai also noted that getting the machines in on the coding would “boost…productivity and efficiency” within Alphabet itself. Which is true, to a point; letting the machines conquer the tyranny of the blank page—even if the page is electronically-generated—can be a help. But with something like coding, it is far too easy to have flashbacks to science fiction stories that lead to mass destruction.
Is Alphabet a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 26 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 34.85% rally in its share price over the past year, the average GOOGL price target of $207.43 per share implies 20.96% upside potential.