Alphabet’s (GOOGL - Free Report) division, Google continues to strengthen its presence in the booming Artificial Intelligence (AI) space on the back of continued focus on technical innovation and customer-oriented software.
Recently, the company revealed that its human sounding AI software called Google Duplex will be available on Apple’s (AAPL - Free Report) iPhones. Notably, the software is capable of making phone calls, fix business appointments and book restaurant reservations with the help of Google Assistant.
Moreover, the assistant sounds almost like a real person on Duplex and thus prevents the direct conversation between Duplex user and the speaker on the other end.
Benefits From the Move
We believe that the latest move of the company will expand the exposure and reach of Google Duplex. Thus, Google is likely to witness a boost in the user base of Duplex, with the huge and loyal customer base of iPhone across the world.
This move will not only benefit Google but also help Apple to enhance the user experience of iPhones.
Google’s recent initiative toward strengthening the relationship with the iPhone maker bodes well. Apart from this, Google’s search platform is the default search engine on iPhone’s Safari browser, which is a tailwind.
Hence, Apple’s brand loyalty and growing popularity of iPhone are likely to continue aiding Google’s growth in search engine and AI markets.
Growth Prospects and Competitive Edge
Per MarketsandMarkets, the global market for AI software is expected to reach $1.15 billion by 2023 by growing at a CAGR of 26.5% between 2018 and 2023.
Per Tractica report, revenues from the implementation of AI software across the world are expected to reach $105.8 billion by 2025 from $8.1 billion in 2018.
We note that Google is well poised to reap benefits from this potential market, with the help of this latest move and growing momentum of Google Duplex that is already available on all Pixel phones and across 43 states in the United States.
Further, rising adoption of Google Assistant, owing to the growing proliferation of AI, will continue to strengthen the company’s footprint this particular market.
The company is likely to gain a competitive edge over Microsoft’s (MSFT - Free Report) Xiaolce, which is similar to Duplex. However, Xiaolce doesn’t support full calls, rather it provides back and forth conversation.
Hence, Google, with the robust features of Duplex and increasing number of supporting devices, are expected to strengthen its market position.
Zacks Rank & Stock to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is Dropbox (DBX - Free Report) . It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings growth rate for Dropbox is currently pegged at 14%.
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