Bernstein downgrades Alphabet, warns it's moving 'too fast' in AI

Alphabet received another downgrade on Tuesday, with Bernstein becoming the latest firm on Wall Street to step away from the Google parent company.

Shares fell 1.5 per cent after the cut to market perform from outperform. The stock is on track for its sixth negative session of the past seven, though it remains up over 30 per cent this year. 

The firm also noted risks related to artificial intelligence, an emerging technology that Alphabet is seen as a major player in, and which has fueled 2023 rallies in megacap stocks like Microsoft and Nvidia.

Alphabet has gone “from too slow to too fast in AI” and the “aggressive push to integrate GenAI into core search results could create a near-term air pocket on search ad pricing,” Bernstein wrote. 

The downgrade brings Alphabet’s consensus rating — a proxy for its ratio of buy, hold, and sell ratings — to 4.655 out of five, the lowest for the stock since April 2018. A year ago, the consensus stood at 4.961 out of five.

Baidu says its new AI beat ChatGPT on some metrics 

Baidu, China’s leading search engine provider, said the latest iteration of its ChatGPT-style service had surpassed the Microsoft-backed OpenAI chatbot on multiple key metrics. Baidu said in a statement on Tuesday that Ernie 3.5, the latest version of its Ernie AI model, had surpassed “ChatGPT in comprehensive ability scores” and outperformed “GPT-4 in several Chinese capabilities”. 
 

The firm cited a test that the China Science Daily ran using datasets including AGIEval and C-Eval, two benchmarks used to evaluate AI  model performance. reuters