Alphabet will be able to get Gemini back on track, says JPMorgan

JPMorgan says Alphabet (GOOG, GOOGL) shares have underperformed year-to-date as investor frustration “has boiled over around the recent Gemini issues.” The firm believes there is also a “manifestation of uncertainty” around Google’s growth and positioning of search in a generative artificial intelligence world going forward, calls for bigger capital returns including a dividend, and tough comparisons to Meta (META), “which seems to be doing everything right.” However, JPMorgan thinks Google will be able to get Gemini back on track and begin to close the generative AI gap with Microsoft (MSFT) and OpenAI. It also believes the company will see further gains in year two of re-engineering the cost structure, as well as elevated capital returns, possibly including a dividend. It keeps an Overweight rating on Alphabet with a $165 price target.