Google-parent Alphabet (GOOG) rose by nearly 6% in market value to exceed the psychological barrier of $150 per share at some point of the regular trading session on March 18. The search giant got a sudden boost from a Bloomberg News report that Apple is allegedly at a developed stage of business talks on building Google's Gemini artificial intelligence engine into its new iPhone. The report was citing "people familiar with the situation", which was enough for another round of an explosive rise of Google stocks. Journalists detailed the subject of negotiations as licensing Gemini generative AI chatbot, formerly known as Bard, for some features which are going to come to the iPhone software during the year, while particular conditions or branding of a potential agreement have not been decided yet.

A deal may be officially announced in summer, Bloomberg report says, with Apple's annual conference of developers in June as an option. Gemini is now considered by many users as probably the best available option for a conversion of text- and picture- based tasks into multimedia content. Apple stock price recovered only within 2.5% on the news, and then wasted most of its gains, while Google kept about 70% of its initial price jump before the opening bell on the next day. This may be explained by considerations that the cooperative work augurs well for a promising future of Google rather than Apple, which probably cannot rely on its own AI-related know-hows. Meanwhile, Google has a potential to expand its AI services to one or two billion active Apple devices, given that Google is now the default search engine on Apple's Safari web browser, which prevents rival services including Microsoft-sponsored ChatGPT from encroaching on Google's clear search dominance.

Less than one week ago, Microsoft representatives testified before EU antitrust regulators, focusing on the rivalry between Microsoft and Google. In their point of view, Google enjoys "a competitive edge" in the generative AI segment due to its "trove of data" and AI-optimised chips, as its "large sets of proprietary data from Google Search Index and YouTube enable it to train its large language model Gemini". "Today, only one company - Google - is vertically integrated in a manner that provides it with strength and independence at every AI layer from chips to a thriving mobile app store. Everyone else must rely on partnerships to innovate and compete," Microsoft said to the commission. It is YouTube, which hosts an estimated 14 billion videos, so that Google has access to such content, but other AI developers do not, Microsoft lawyers suggested.

So, there are two consecutive reasons in a short to remind investors of Google's even brighter-than-expected prospects in the AI field. Our ideas on Google stock's target price now extend to at least $175 per share, compared to about $147 at the time of this writing. The average Wall Street analysts' 12-month price target is now shifted to $164.17, which is also +11.5% upside from the current levels.