💡 Google I/O 2023: A New Era for Google

This week's Google I/O event was jam-packed with product updates, including the unveiling of the long-anticipated Pixel Fold, Pixel Tablet, and budget-friendly Pixel 7a.

The highlight of the event was Google Search, which is set to undergo a huge transformation with the integration of… you guessed it… generative AI.

Google has faced heightened competition in Search, with Microsoft recently integrating OpenAI's GPT-4 into Bing, posing a potential threat to Google's longstanding dominance.

🔎 The New Google Search Experience

• New User Experience: Google plans to use generative AI to make searching easier. For instance, when a user queries about a suitable location for a family with kids and a dog, Google Search will provide an AI-powered snapshot of relevant information and links for more in-depth exploration.

• Conversational Mode: The new search experience allows for context-sensitive follow-up questions, simulating a conversation with the search engine.

• Shopping: Google's new search experience also extends to shopping. The AI summarizes important factors to consider when searching for a product, along with product descriptions that include relevant reviews, ratings, prices, and images.

• These new features, called SGE (Search Generative Experience), will initially be launched via Search Labs. As of the initial launch, SGE is only available in the U.S. and supported in English.

Other Google Announcements

• Google launched a new Large Language Model called PaLM 2 that is now powering Google’s AI applications and aims to compete with GPT-4.

• Google’s Bard chatbot is now available in 180 countries, and there is no longer a waitlist.

• Google Workspace apps like Docs, Sheets, and Slides received new AI-powered features.

📝 This Week’s Earnings Roundup

• 🏰 Disney ($DIS) took a ~8% tumble this week (its biggest decline in 6 months) when it reported losing 4 million Disney+ subscribers in the quarter. Despite this, it wasn’t all bad news, with steaming losses narrowing from $850M to $659M. Looking ahead, CEO Bob Iger plans to increase ad-free tier prices & cut down on films & TV shows to reduce costs and continue his hyper-focus on profitability. Iger also plans to combine Hulu and Disney+ in a single app later this year.

• 🛞 Canadian Tire ($CTC-A) fell ~4% after reporting that Q1 profit and revenue were down from a year ago, citing the unseasonably mild winter weather, a slow start to spring in several regions of Canada, and a fire at a key distribution center in Ontario as reasons for the decline.

• 🏠 Airbnb ($ABNB) tumbled ~15% this week despite beating analyst expectations as investors latched onto the company’s projected lower expectations for Q2, most notably that it was expecting bookings & daily rates to decline compared to last year. Airbnb CEO says that customers want ‘affordability’.

• 🚀 Upstart ($UPST) skyrocketed up ~24% this week after the AI-driven lending marketplace secured an additional $2 billion in funding.

• 🎮 Roblox ($RBLX) was up ~8% this week after hitting record revenue (up 22%) and bookings growth (up 23%). Daily active users also grew to a record 66.1M. Despite this, the company’s net losses increased from $160M one year ago to $268M.

• 🤖 Palantir ($PLTR) was up ~24% this week after reporting a strong earnings forecast & claiming hot market demand for its new artificial intelligence tool. Palantir was profitable in Q1 and predicted 2023 will be its 1st profitable year.

• 📉 PayPal ($PYPL) fell ~18% this week despite beating analysts’ expectations for earnings per share - posting $1.17 compared to the $1.10 expected - driven by cost cuts and an increase in new accounts. The drop came after the company lowered its operating-margin outlook from 1.25% to 1.00% for the year ahead, with many analysts believing the stock will be ‘stuck’ in the near term.

• 🔋 Lucid ($LCID) shares tumbled ~9% after significantly missing Q1 earnings and revenue expectations ($149M in revenue compared to $210M expected). Lucid insists that it has enough cash to continue operations into at least the second quarter of 2024 (ending Q1 2023 with $3.4B in cash).

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• Brookfield Asset Management raised $19B for new funds this year.

• EU antitrust regulators are set to approve Microsoft’s acquisition of Activision (but it’s still blocked by the UK).

• Scotiabank and HSBC were hit with $15M and $7.5M penalties.

• Wendy’s is now automating its drive-thru with an AI chatbot.

• Meta is expanding ads on Facebook Reels for creators.

• Amazon plans to sell ‘related physical items’ in mobile games.