A Tailwind for GOOG Stock
Read any tech publication and you’ll hear the same thing: Alphabet Inc (NASDAQ:GOOG)—also known as Google—and its peers have made a breakthrough in artificial intelligence (AI). It’s obvious to all of us who write about these things that AI could launch Google stock (GOOG stock) into the stratosphere.
Just to clarify: when we say “artificial intelligence,” don’t think of what you’ve seen in movies.
This is not the “Terminator” or some other piece of science fiction with a dystopian future. If you want to understand what modern AI is like, just pick up a smartphone. Remember “Siri”? That voice-controlled digital assistant is Apple Inc.’s (NASDAQ:AAPL) early version of AI. Google has one as well.
These types of software can listen to your questions and look up answers. They aren’t bound by a specific set of questions, nor are there any hard limits to their understanding. Sooner or later, these AIs will be smarter than us, but no one knows when that day will come.
Until then, analysts like me spend time thinking about how to make money from these technological advancements. There are a good many ways to profit from a discovery of this magnitude, which is why we call it a “Mega-Trend.”
AI has the potential to disrupt almost every single industry on the planet. For instance, how do you think driverless cars operate? There is an AI embedded into self-driving cars. They see the landscape around them, process the data, and make decisions about how best to drive.
GOOG stock is competing in this area, alongside niche players like Tesla Motors Inc (NASDAQ:TSLA). Ten years ago, self-driving technology was a shadow of a dream, but then the AI revolution began. There are literally dozens of ways to cash in on this Mega-Trend.
Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), and others have great projects in the works, but Google’s strategy is perhaps my favorite. It has decided to invade the healthcare industry.
Many of you are probably aware that healthcare is hugely profitable. The margins are thick, the customer relationships are stable, and the benefits are tangible to average folks. It’s an incredible line of business to enter, and not just because it could send GOOG stock through the roof.
Just look at what Google is doing in the U.K. It signed a deal with the National Health Service (NHS) to implement an AI-enabled app called “Streams.” This app flips through kidney scans to learn how diseases grow over time. That way, it can detect them earlier. (Source: “NHS to use Google DeepMind AI app to help treat patients,” Engadget, November 22, 2016.)
No individual patient data is leaked or divulged to the AI, because it learns from the patterns it sees. It doesn’t need to violate privacy. But, obviously, these services won’t come cheap. Hospitals and other healthcare institutions are going to have to pay up for these services, and Google stock (GOOG stock) will reap the rewards.
Based on past Mega-Trends—the Internet, the “iPhone,” and the personal computer (PC)—we could see huge amounts of wealth creation in the coming years. Google stock (GOOG stock) is an easy bet on this Mega-Trend, mainly because it has the tech, the resources, and the size to compete.