Analysts at Pivotal Research issued a cautionary note regarding OpenAI, creator of ChatGPT, highlighting potential spending cuts due to rising obligations. They predict market turbulence for AI stocks, similar to the 2000 tech bubble, which could lead to a consolidation of competitors, with Google expected to dominate. Pivotal anticipates Google Gemini will gain market share, especially with its partnership with Apple AI. This may pressure OpenAI’s finances by 2026, pushing it to cut capital expenditures. The analysts credit Google’s Tensor Processing Unit (TPU) technology as a sustainable advantage that could draw customers from Nvidia, with significant revenue potential from third-party sales. Pivotal raised Google’s Alphabet stock price target to $400 from $350, maintaining a ‘Buy’ rating. They emphasize the resilience of Alphabet’s search business, which supports Gemini’s growth, ultimately positioning Google favorably for monetizing its AI investments effectively.
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