TradingKey - Google (GOOG) hosted its I/O conference on May 20-21, which was viewed as a "critical moment" for the company to bolster its faltering stock price. However, on May 20, Google shares fell 1.5%, closing at approximately $165. Despite the company's advancements in artificial intelligence over the past year, it appears insufficient to regain investor confidence.

Since 2025, Google's stock has underperformed the S&P 500, having fallen 12% by the start of the conference, and its position as a tech giant in the search engine market is under threat. During the conference, Google announced upgrades to its leading AI models and launched the new Gemini subscription plan, aiming to enhance Google AI's commercial viability in an era dominated by AI models. Under this plan, AI Ultra users pay $249.99 per month, roughly $50 more than similar high-end offerings from OpenAI.

Yet, given the abundance of AI models available today, can Google AI become a game-changer by addressing user pain points? Another highlight of the conference, "AI Mode," might provide an answer to this question.

Google introduced "AI Mode" on its search page, allowing users to search for information through chatbot interactions rather than traditional link lists. This mode boasts advanced reasoning and personalization capabilities, enabling users to get answers to questions and even execute actions, such as booking tickets or virtually trying on clothes.

However, considering Google's reliance on search ad revenue, a shift to AI-driven search methods might lead to a loss in traffic and advertising income. Vice President Robby Stein mentioned that Google is exploring ways to incorporate ads into "AI Mode" search results.

Currently, the stock market remains unconvinced. Google has seemingly played all its "big cards" with a slew of AI feature releases encompassing text, images, video, music, and a variety of creative tools. Whether the stock price will recover depends on the integration between Google AI and the user market.

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