WASHINGTON, DC - OCTOBER 30: Google and Alphabet CEO Sundar Pichai departs federal court on October ... [ ] 30, 2023 in Washington, DC. Pichai testified on Monday to defend his company in the largest antitrust case since the 1990s. The U.S. government is seeking to prove that Alphabet's Google Inc. maintains an illegal monopoly in the online search business. The trial is expected to last into November. (Photo by Drew Angerer/Getty Images)

Can the huge sums companies invest in generative AI produce a return on investment?

The answer depends on how you define return. For publicly traded companies, the return comes from faster-than-expected growth. The reason that matters is investors reward such growth with a boost in stock price, as I noted in my book, Brain Rush.

By that metric, Alphabet, Google’s parent company, is earning a return on its generative AI investment. The proof is in the company’s faster-than-expected third quarter growth in cloud services and higher-than-expected profits.

Here are three reasons, Google stock is likely to continue to keep rising:

To be sure, antitrust lawsuits against Alphabet loom over the company’s future, noted the New York Times. However, if the company can invest more in AI and get faster growth and higher margins in return, investors will bid up........

© Forbes