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alphabet Shares rose 5% on Wednesday after Google unveiled its latest artificial intelligence model, Gemini 3, sparking investor optimism.
The new model is an improvement over the previous model, Gemini 2.5, which Google released about eight months ago.
Google says Gemini 3 will allow users to get better answers to more complex questions and require fewer prompts to determine the context and intent behind the request.
Gemini 3 will be integrated into Google’s search products, Gemini apps, and enterprise services.
Analysts at DA Davidson said in a note Tuesday that they were immediately impressed with Gemini 3, calling it a “truly powerful model” and “currently state-of-the-art” based on its preliminary tests and scores against AI benchmarks.
“We would go so far as to say that this latest model (from Google DeepMind) meaningfully advances the frontier in certain areas, with capabilities far beyond what we would normally expect from this generation of Frontier models,” the analysts wrote. The company has a neutral rating on Alphabet stock.
With Gemini 3, Google is offering a GPT-5 model to compete with OpenAI, which sparked a generative AI boom with the launch of ChatGPT in 2022.
Other players such as Anthropic, creators of the Claude chatbot and the Sonnet 4.5 model, are also gaining popularity.
Analysts at Bank of America Securities said Gemini 3 is “another positive step” for Google to close the “perceived LLM performance gap” with its AI competitors.
“AI Overviews and Gemini’s healthy adoption metrics demonstrate that Google is successfully attracting users to its AI surfaces despite increased competition, and should help allay concerns about potential search disruption,” said analysts who rate Alphabet stock a buy. “While it is still too early to evaluate the full capabilities of the new model, some early reviews have been positive.”
Alphabet’s stock price has also been rising in recent days, driven by Warren Buffett’s rise in stock prices. Berkshire Hathaway has revealed a new investment in Google’s parent company, marking the conglomerate’s biggest technology investment in years.
Alphabet’s stock price is up more than 55% since the beginning of the year.
