Alphabet, the parent company of Google, experienced a 4. 6% increase in its stock price following reports of a potential partnership with Apple in the field of artificial intelligence (AI). Apple is looking to incorporate Google Gemini, an AI system, into its iPhone. The partnership could mirror their previous deal in search technology, which faced regulatory scrutiny. Despite potential antitrust concerns, such a collaboration could prove beneficial for both companies in the AI race, especially as Apple aims to catch up with industry leaders like Microsoft. Although Apple could develop its own language model, Google Gemini is seen as a more viable option for now. However, both Gemini and ChatGPT-4 Turbo are still considered works in progress and prone to occasional errors.

Nevertheless, users are willing to accept these flaws and conduct fact-checking themselves. In the future, Apple may replace Gemini with its own language model. The partnership has the potential to help Google and Apple surpass Microsoft in the AI race, and if a deal is reached, it could result in a valuation multiple expansion for Alphabet stock. Analysts consider Alphabet a strong buy, with a 12. 3% upside potential, while Apple stock is deemed a moderate buy with a 16. 3% upside potential. While discussions between Google and Apple are ongoing, nothing has been confirmed as of yet. In the early stages of generative AI, Apple is seeking an AI partner to ensure its products are well-versed in the technology.