Only hours ago, we discussed a move with Alphabet (NASDAQ:GOOG), and a line of new AI tools that were finding their way into everything from cars to fintech. One lesser-noted partnership emerged out of that event, with Alphabet and Ginkgo Bioworks (NASDAQ:DNA) teaming up to bring more AI capability into the biotech stock. That was enough to send shares blasting up over 24% in Tuesday afternoon’s trading.
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So what is this partnership, exactly? The move, a five-year partnership, will feature Ginkgo Bioworks tapping Google’s AI systems for drug development. More specifically, Google’s Vertex AI system will give Ginkgo a leg up in not only genomics but also protein function and even synthetic biology. That will effectively allow Ginkgo to stage tests of new drugs without requiring test subjects. It’s a kind of hypothetical testing that comes even before mice get involved.
But it won’t just be access to Google Cloud and AI products, either. Google is also set to put in some cash to give Ginkgo a little help in developing “foundation models” and improving current applications. Ginkgo’s “foundation models” are actually pretty heavily in demand; over 100 active research and development operations are currently on its platform, with users ranging from Biogen (NASDAQ:BIIB) to Novo Nordisk (NYSE:NVO). Even government agencies like DARPA are represented as Ginkgo users.
Despite this impressive lineup of users and new potential, analysts don’t think much of Ginkgo Bioworks’ chances. A nearly perfect split emerges, with two Buy ratings, one Hold, and two Sell ratings adding up to a Hold consensus on Ginkgo Bioworks stock. Further, with an average price target of $2.65, Ginkgo Bioworks stock offers investors 19.91% upside potential.
