Robotics May Be Alphabet’s (GOOGL) Next Big Bet, Says Baird

Alphabet Inc. (NASDAQ:GOOGL) is one of the top 10 picks from Harvard University’s stock portfolio. The stock’s position in the portfolio was marginally up in Q1, and it accounted for around 9.8% of the portfolio weight.

Following the Computer Vision and Pattern Recognition (CVPR) conference held in mid-June, Baird’s analyst Colin Sebastian published a note on June 20 highlighting a potentially underappreciated area of growth for Alphabet: robotics. While the company is best known for its core businesses in Search, YouTube, Android, Cloud, and hardware, Sebastian believes its efforts in robotics AI, particularly through DeepMind, could become a meaningful contributor over time.

Robotics May Be Alphabet's (GOOGL) Next Big Bet, Says Baird

Google introduced its new Gemini Robotics AI stack at the event, designed to support physical robots capable of language understanding, visual processing, and real-world decision-making. Unlike current industrial robots, which are built for specific tasks, the next wave, enabled by systems like Gemini, aims to handle a broader range of functions with greater adaptability. The analyst compared the upcoming opportunity to the ‘ChatGPT moment’ for robots.

Sebastian pointed out that the Gemini platform incorporates what he refers to as “embodied reasoning”, allowing the same software stack to be deployed across multiple hardware form factors. Demonstrations included robots performing nuanced actions such as folding paper or finding objects, tasks that require a deeper level of contextual understanding than traditional automation.

He believes this technology could play a foundational role as physical AI adoption accelerates, potentially evolving into a core platform alongside Android and Google Cloud. While still early, the long-term market opportunity, estimated by some to be over $100 billion, positions Alphabet as a potential leader and a “key enabler” in a rapidly emerging space that may include competition from companies like OpenAI, Amazon, Meta, and Tesla.

Given this potential, Sebastian reiterated his Outperform rating on Alphabet shares and maintained a price target of $190.

Alphabet Inc. (NASDAQ:GOOGL) is the parent company of Google and a pioneer in internet-related services and products, including online advertising technologies, search engines, cloud computing, software, and hardware. The company is also a leading investor in data centers and fiber networks, operating a vast global network of data centers that support its cloud services and other digital offerings.

While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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