Google stock lags behind QQQ as the Gemini controversy adds to the woes
The Magnificent Seven companies, the world’s biggest seven stocks, extended their 2023 momentum this year and continue driving the broader equity market to new peaks.
But despite the overall upward trajectory, not all tech giants have acted as catalysts, with Alphabet (NASDAQ:GOOGL), Apple Inc (NASDAQ:AAPL), and Tesla Inc (NASDAQ:TSLA) lagging behind the likes of NVIDIA (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Amazon.com Inc (NASDAQ:AMZN).
As a result of several headwinds, Google stock is down 4.5% in 2024, notably underperforming the tech-oriented Invesco Invesco QQQ Trust (NASDAQ:QQQ) ETF, which gained over 8.4% since the start of the year, hitting a new closing all-time high last Friday.
Google shares have hit a new three-year low in its performance relative to the Invesco QQQ amid persisting challenges for the tech giant.
Analysts attribute this relative underperformance to several factors, including a perceived lack of an AI strategy, issues with cost control, and rising competitive pressures.
Among the biggest factors that contributed to lackluster performance in Google stock is the latest debacle related to Gemini, Google’s artificial intelligence (AI) model.
Last month, the tech behemoth implemented a restriction on its «Gemini» chatbot technology, preventing users from creating human images.
The move came after incidents where users utilized Gemini to generate images of Black Founding Fathers and racially diverse Nazis, leading to widespread controversy. Google acknowledged the problem, stating there were «inaccuracies in some historical depictions.»
In a recent video filmed at San Francisco’s AGI House, Google co-founder Sergey Brin said the company’s AI models, including Gemini,
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