Alphabet shares have fallen 15% from their May highs as investors question the company's position in artificial intelligence, but MoffettNathanson analyst Michael Nathanson argues Wall Street may be focusing too heavily on AI model rankings rather than Alphabet's broader cloud opportunity.
Recent departures from Google DeepMind and delays to the Gemini 3.5 Pro model have raised concerns about Alphabet's ability to stay at the forefront of AI. Nathanson, however, believes Alphabet is pursuing a different strategy from AI-focused rivals such as OpenAI and Anthropic, with Google Cloud potentially representing a more important driver of long-term value.
MoffettNathanson projects Google Cloud revenue could grow at a 48% compound annual growth rate through 2030, as businesses increasingly adopt AI infrastructure and cloud services.
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