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The analysts highlight 4 key reasons why he is moving to the sidelines:
On the competition front, the analysts still don’t see Bing or ChatGPT as “major threats” given the superiority of Search.
“We see some tail risk that Meta’s AI chat could gain traction given the scale of users across its apps but we view this as more speculative. Our original concerns around the cost of GenAI have moderated, though near-term risk remains and the co did increase capex guidance last quarter and flagged a mix skew towards (faster depreciating) technical infrastructure. As such, while we view both the cost and competitive risks as less severe, some element of these risks remain,” they said in a note.
Alphabet shares are down over 1.5% in premarket Monday.
