Is Alphabet (Google) In Desperate Need of a Major Overhaul?

Ready to place your bets? We’ve got a good match in store today.

Let’s see how our fighters stack up against the tech-heavy Nasdaq 100 index’s year-to-date gain of 10%:  Alphabet at 2% vs. Meta at 47%.After their recent moves, Meta and Alphabet share many fundamental similarities:

• Investors expect similar growth from Meta and Alphabet in the next three years.
• Both stocks trade at similar valuation multiples.

Choose your fighter: Meta or Alphabet?

Beyond their heavy exposure to the advertising market, here’s where they differ:

• Meta’s focus is on the metaverse and virtual/augmented reality.
• Alphabet’s focus is on the cloud and artificial intelligence.

AI has been the buzzword this year, and many stocks with exposure have risen. But Alphabet has made heavy AI investments in recent years.

So why hasn’t Alphabet taken part in the AI surge?

They’ve been in the AI news cycle for the wrong reasons — threatened by Microsoft and OpenAI’s partnership. And Alphabet’s problems go even further up, all the way to the top.

• The Information compared Alphabet to IBM — bureaucratic and slow-moving — and said CEO Sundar Pichai isn’t the right person for the role.
• In 2021, former execs called out Pichai’s slow and indecisive leadership style as the reason for Google’s problems.

But Pichai may have overcorrected his leadership style in the other direction — being heavily criticized for mishandling layoffs and rolling out a “rushed, botched” and “comically short-sighted” announcement of its ChatGPT competitor, Bard.