Tomer Solel is a Financial Analyst at I Know First. He graduated from Cal Poly Pomona with a bachelor’s degree in applied mathematics.

Google Artificial Intelligence: Summary

Laying the groundwork with Android in 2007, Google has since stuck to its plan to dominate AI with the smartphone, making amazing profits ever since.

smartphone, making amazing profits ever since. The Google Glass is another one of Google’s involved AI products, allowing people to wear something that looks like eyeglasses, and is practically a wearable hands-free computer or smartphone.

In November, Google open sourced TensorFlow, which is its artificial intelligence engine that uses deep learning.

Ford is now in talks with Google to implement self-driving cars.

Analyst Recommendation

I Know First is bullish on Google in the short term.

Introduction

Alphabet Inc. (NYSE: GOOG), better known as Google, is an American multinational technology company specializing in internet related services and products. Most of its profit comes from AdWords, an ad service next to the Google search results. Google was founded by Larry Page and Sergey Brin privately in 1998 and was eventually incorporated to the public in 2004. Incorporation led to a rapid growth which yielded a chain of different products and a quick rise. In 2013, Google was ranked as the most visited website, with over one million servers and over one billion requests for each server every day. Google is currently ranked 3rd in the world in terms of most valued companies with its brand valued at over $65 billion. But Google couldn’t have done all of this without its extensive use in artificial intelligence, as artificial intelligence has been taking over the world. Starting with the first Android phone in 2007 and continuing with the Google glass and most recently with the TensorFlow engine, and the talks with Ford about a self-driving car, Google has relied heavily on artificial intelligence during its success.

source: ai.ytimg.com

Android Phone Breakthrough

Android was Google’s breakthrough in terms of AI. First released in 2007, the Android Alpha was the first Google smartphone and the first product to use AI by the company. Since then, Google has launched many more Android phones and has relied more and more on AI. Most famously, Android phones have SILVIA, which is an artificial intelligence system which pretends to be another person and lets you talk to your device like you would talk to another person. SILVIA’s code is so advanced that it is now being used for training and simulation applications by the U.S. military. It is widely regarded as the most advanced intelligence system on the planet. Skyvi is another AI device which is like a Siri for android, and it does things such as voice texting, finding places, and social media updates. Now, eight years after laying the groundwork with the first Android phone, Android has an 80 percent market share, and now Google is using the same trick with artificial intelligence. That has helped Google gain an amazing 144% over the last five years. The use of artificial intelligence in Android has helped the stock of Google rise.

Source: technobuffalo.com

Google Glass AI – You Haven’t Seen Anything Yet

The Google Glass is another important Google product that uses artificial intelligence. The Google Glass is basically a head-mounted wearable computer which was developed by Google. From recording a video or taking a picture hands-free to social networking and GPS, the sky is the limit for this product, and it is just starting its take off. The product came out back in April 2013, and it currently sells for $1,500. This project is known as project glass, and there is a lot of artificial intelligence behind it. In this product, not only is there the type of AI we have seen before but also, there are other behind the scenes implementations of AI within this product. This makes us think that in the future, AI could be used to build wearable computers which will take on more complex tasks than what we are seeing today. In the future, we will see more enhanced, improved products. A more sophisticated AI platform could allow doctors to have wearable screens which could help them diagnose patients. Ever since 2013, there have been a lot of improvements to the product. Google Glass has increased Google’s revenues dramatically, raising the share’s price. Google Glass is another product which uses extensive AI, helping the stock rise even more.

Source: wired.com

Tensorflow in Google

TensorFlow is an open source software library for numerical computation using data flow graph. It is an artificial intelligence device that uses deep learning. In November 2015, Google announced that it open sourcedTensorFlow. That means that the code that powers Google’s intelligence is now accessible to anyone for free. This shows that the future in AI might lie in data, not in code as the data is still being kept secret. This TensorFlow code was originally developed by Google Brain team members for the purposes of conducting machine learning and deep neural networks research, but can now be used for a variety of other topics. This deep learning is the area that gives Google the power to provide groundbreaking services. It is now using this device to predict what the site’s users might need. This shows Google’s belief that machine learning is a key ingredient to future technology. Since open sourcing TensorFlow, the Google stock has kept rising, notably returning over 5% in the week after the news became public. With Google one of the world’s most advanced machine learning systems available to the public, we can expect to see huge strides in artificial intelligence.

Self-Driving Ford Cars

Earlier this week, Google started talks with Ford to create a joint venture to build self-driving vehicles. Building those self-driving cars will be done using Google technology. Those cars could be in the market as soon as 2020. Google is expected to make its self-driving cars unit its own business under its parent company of Alphabet Inc. Ford’s plan for self-driving cars includes automatic braking, steering, and more. Such a partnership could spread the introduction of self-driving cars, a direct result of Google AI. This would be great for safety as self-driving cars would dramatically decrease the number of car crashes. This news led to a rise of $2.23 per Google share, which now stands at $750 per share. Self-driving cars could be a huge source of revenue for Google in the future.

Source: theoatmeal.com

Analyst Recommendation Source: Yahoo Finance

In this chart, we can see that among analysts Google is continuing to be a strong buy. 5 analysts ranked Google as a strong buy while 7 ranked it as a buy, a trend that has been holding since two months ago. Google certainly seems to be a safe investment for the short term at least. Artificial intelligence probably has a lot to do with the fact that analysts are bullish on Google.

Algorithmic Recommendation

I Know First provides daily investment foresight, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database and utilizes it to predict the flow of money across 3,000 markets.

The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

I Know First’s algorithm was able to correctly predict the behavior of GOOG’s stock price in the past. Indeed, I Know First wrote a Seeking Alpha article about Google on January 16th, 2015, claiming that 2015 will be a rebounding year for the stock. Since then, the stock increased an amazing 47% in the last 11 months.

Previous 3-Month & 1-year Algorithmic Performance For GOOG.

Having demonstrated an example of when I Know First’s algorithm was able to correctly predict the behavior of GOOG’s stock price in the past, looking at the current forecast can add meaning to the fundamental analysis above;

The figure above includes a 7-day and 14-day prediction from December 22nd, 2015. Currently, our algorithm is bullish on Google in the short term.

Conclusion

In conclusion, artificial intelligence is a huge factor in Google’s success, and it is going to develop even more. On top of that, On December 23rd, 2015, Mashable released an article in which they announced that Google was working on a new messaging app that uses artificial intelligence to provide users with answers to search queries. Even though Google has not been the best with prior attempts at social services, the company is likely hoping it will be able to both reach new users and keep existing ones engaged as messaging platforms become more ubiquitous.