Gemini gives Google continued strength in its core advertising business, says Citi's Ron Josey

Core Insights - Google shares are experiencing a rise following a 6% gain, attributed to Meta's consideration of using Google's tensor processing units in its data centers by 2027 [1] - The competition in AI models is intensifying, with Google's Gemini currently perceived as leading [2][4] - Google's search business is showing sequential growth, indicating increased user engagement and satisfaction [8][13] AI Models - Google's Gemini is seen as a significant advancement, enhancing both search and Google Cloud services [4][9] - The competitive landscape includes other players like Anthropic and OpenAI, but Google is recognized for its scale and integrated services [6][11] - User migration to the best AI models is expected, but a strong competitive moat exists around established companies like Google [6][11] Cloud and Chip Technology - Google Cloud is experiencing substantial growth, with a backlog exceeding $50 billion [9][15] - The potential partnership with Meta regarding chip technology is generating investor interest, contrasting with Nvidia's stock performance [13][14] - Google possesses a comprehensive ecosystem with models, chips, and cloud delivery mechanisms, positioning it well for future demand [14][15] Market Position - Google is currently performing strongly compared to other major tech companies, with a notable shift in valuation dynamics, particularly against Amazon [16] - Meta is also recognized for its growth potential, with upcoming strategic insights expected in 2026 [17][18] - Overall, the short-term outlook for Google, Meta, and other major players remains positive, with Google being highlighted as a strong performer [18]