Alphabet's Gemini AI Models Go Live as Cloud Growth Heats Up

Alphabet's Google Cloud revenue jumped 82% in the June quarter, and now the company is pushing its Gemini Live AI models to drive further growth. The latest release of Gemini 3.8 Live and 3.8 Live Extended Thinking are now generally available for developers to use, with a focus on low-latency voice work and cost efficiency.

The Extended Thinking model, in particular, is designed for more complex tasks that require multi-step reasoning, which could be a significant factor in driving adoption and revenue growth. However, it's not just about the models themselves - Alphabet will also be deprecating its Gemini Omni Flash Preview endpoint on September 30, which means customers must choose a production model by then.

The success of these new AI models is closely tied to Google Cloud demand, and analysts are already factoring in significant growth from this segment. Bank of America's Justin Post has a target price of $430 for Alphabet stock, while Rosenblatt's Scott Devitt estimates it will hit $410. S&P Global also has a consensus target of $428.41.

But not everyone is convinced that Gemini Live will be a major driver of revenue growth. Some analysts argue that Alphabet's cloud growth could continue even if the new models are only used as a product-refresh cost, rather than driving sustained usage. They point out that customers may delay migration to the new models or choose another option altogether.

The next major test for Google Cloud and Gemini Live will come in October, when Alphabet releases its next set of earnings results. If the company can demonstrate significant growth from these AI-driven models, it could be a major boost to investor confidence and valuation.