Bard AI Nipping At ChatGPT's Heels: Analyst Highlights Google's Progress In Closing Performance Gap

Alphabet Inc’s GOOG GOOGL CEO Sundar Pichai announced an upgrade for the company's Bard AI, moving from the lightweight LaMDA model to the improved PaLM model, potentially closing the performance gap with OpenAI's ChatGPT.

The migration is expected to enhance Bard's math and coding capabilities and contribute to further improvements in AI capabilities in the upcoming months. The development is leading analysts at Bank of America Global Securities to lean bullish on Google’s new AI.

The Google Analyst: Justin Post maintained a Buy rating on Google, and raised the price target from $119 to $125.

While ChatGPT's growth remains robust, with daily visits surpassing 60 million and an increase of 29% month-over-month, Post said data suggests that ChatGPT’s growth has not impacted Google's web traffic or search download activity.

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Google's daily web visits remain at 3 billion, and the search giant's global search market share stands at 93.2%, up year-over-year, though down slightly by 0.20% month-over-month.

Bard's upgrade indicates Alphabet's determination to close the performance and perception gap between its AI offering and Microsoft Corporation’s MSFT Bing, the analyst said. Adding that Bing currently holds a time-to-market and PR advantage.

Despite competition, Post said Google's extensive data, distribution, and testing/learning advantages position it well for stable search share and improved Bard capabilities in the future, which should “help to alleviate an overhang on the stock.”

Bing's downloads have stabilized since the release of ChatGPT-4, averaging around 117,000 daily downloads. In contrast, Google's download activity has remained relatively stable since November, the analyst said.

Price action: Shares of Google are trading 0.90% lower to $102.80, according to data from Benzinga Pro.

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