As of September 23, AI video creation in Vids no longer costs anything for Google and Workspace users. The upgrade draws on Gemini Omni 1.1 Flash, the newest addition to Google’s model lineup. Videos can be generated in full high definition, with users deciding how long each clip lasts. Longer scenes can also be built without characters or lighting drifting between shots.
Alphabet Inc. (NASDAQ:GOOGL) is aiming it at small businesses and marketers, offering templates for those without editing experience. Every clip carries a hidden SynthID watermark. The move expands on an April update that first brought AI video to free accounts. Google’s free AI video push is part of a much broader effort to monetize AI across Search, Cloud, and advertising. We recently compared Alphabet with Amazon to see which AI cloud stock makes the stronger investment case.
What It Means for Google
I see this as a classic Google play. Give the tool away, build the habit, and make money around it. There are a few ways this could pay off. Free users who hit their limits can upgrade to paid AI plans, which offer far more video generations. Businesses that start using Vids are more likely to stay in Workspace instead of switching to Microsoft or Canva. And since Vids can publish straight to YouTube, more videos mean more content for Google to run ads against.
Investors weren’t convinced on the day, though. Alphabet shares fell nearly 4%, although the decline came amid a broader tech selloff and cannot be clearly attributed to the Vids announcement. I think that reaction misses the bigger picture. Google has done this before with Gmail, Maps, and Android, and each one ended up strengthening its core business considerably.
Institutional interest in Alphabet had been growing even before this launch. The number of hedge funds holding the stock rose from 265 at the end of Q1 2026 to 275 by the end of Q2. Their holdings also rose from $72.4 billion to $93.7 billion.
That kind of backing gives me more confidence in Google’s long-term AI strategy. So the recent dip could end up creating an entry point for investors.
What It Means for Micron
Micron Technology, Inc. (NASDAQ:MU) won’t get a mention in Google’s announcement, and most investors wouldn’t see a link between the two either. But I think it’s one of the quieter winners here. AI video generation is computationally intensive and can increase demand for accelerator memory, including high-bandwidth memory, where Micron is one of the major suppliers. The demand also builds faster than it seems. It’s rare to get the perfect clip on the first try, so most users will run the same prompt again and again, drawing on that memory each time.
Micron’s Valuation Assumes the Boom Won’t Last
Micron’s valuation reflects the cyclical nature of the memory business. The forward P/E of 7x has no meaningful 5-year average to compare against, since Micron’s loss in 2023 distorts the history. On its own, though, it looks fairly inexpensive for a business growing rapidly. The EPS outlook suggests that Wall Street does not expect the boom to last. Analysts expect earnings to grow 128% in fiscal 2027, which is exceptional since it comes on top of a record year. The earnings then slow down to a growth of just 9% in 2028, before falling 23% and 67% over the next two years. It is clear that Wall Street thinks these high margins and sales are not sustainable, either because supply will catch up or because an improvement in technology will resolve the memory bottleneck. We made a case for this previously, debating whether this Micron cycle is different.
Micron has plenty of financial flexibility too, with $38.36 billion in cash and equivalents and another $5.07 billion in short-term investments, against roughly $5.18 billion in total debt. If everyday AI tools keep demand steady, those later estimates could prove too conservative. Despite trading at a forward earnings multiple that looks like an anomaly, there is one stock that has even stronger revenue growth and operates in an emerging technology. You can read about it in our 10 High Beta Stocks With Strong Revenue Growth.
What interests me more is how this fits the bigger debate around Micron. The main worry is that memory demand depends heavily on a handful of big tech companies building data centers. If they slow spending, the cycle turns, and analysts already expect Micron’s earnings to fall sharply by 2029. Free tools like Vids give those companies a stronger reason to keep buying, since the demand now comes from millions of everyday users. Steady usage like this is exactly what could help the cycle run longer than many expect.
Micron has seen an even sharper jump in hedge fund interest. The number of funds holding the stock rose from 154 at the end of Q1 2026 to 184 by the end of Q2. The value of their holdings more than doubled from $14.3 billion to $34.9 billion, partly helped by Micron’s rising share price.
Hedge funds already seem to be betting on a longer memory cycle. If consumer AI tools keep spreading, that bet looks increasingly reasonable to me.
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