Jim Cramer, the host of CNBC’s “Mad Money,” has suggested that Google’s parent company Alphabet Inc GOOGL GOOG should streamline its business operations, following the example of Apple Inc AAPL.
What Happened: Cramer expressed his concerns about Alphabet’s diverse business ventures and the lack of transparency during a recent episode of “Mad Money.” He believes that a more focused approach to business could potentially boost Alphabet’s stock performance, reported CNBC on Monday.
"It's time for Google, Alphabet — whatever, I don't even care — to stop running as a skunkworks for all sorts of ideas that may or may not work and start focusing on actually making some money," he said.
"Otherwise, let's just say: I smell a skunk."
He pointed out that Alphabet’s stock took a hit after the company announced a pause in the image generation feature of its artificial intelligence model, Gemini. This move raised concerns among investors about the potential impact of AI blunders on Alphabet’s core search business.
Cramer, who has been a long-time supporter of Alphabet, criticized the company for being a “black box” with numerous unprofitable divisions. He also questioned the effectiveness of its self-driving car business, Waymo, and described its AI efforts as “episodic.”
He suggested that Alphabet should follow Apple’s lead and cut projects that are no longer effective. Cramer cited Apple’s recent decision to cancel its electric car project as an example of “embracing efficiency.”
Why It Matters: This came after Apple pumped the brakes on its Apple Car ambitions and abandoned its EV development project dubbed Titan. The report indicates that Apple broke the news on Tuesday to nearly 2,000 employees working on the project. Two executives reportedly told staffers that Apple will shift many of the employees designated for EV development to the company's generative AI division. Layoffs are still expected, but it's not clear how many workers will be let go.
Meanwhile, Gene Munster called Apple one of the most underappreciated AI plays in the market. The tech analyst said he expects Cupertino to release its own AI foundation model sometime in June.
Despite these challenges, hedge fund titan Bill Ackman sees Alphabet as a lucrative investment opportunity, particularly in the field of AI. Ackman highlighted the company’s strong position in the market, indicating that Alphabet’s potential is not being fully realized due to its high expectations and pricing.
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Photo: Courtesy Jonny Gios via Unsplash
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