Key Takeaways
- Google plans to unveil Gemini 3.8 Flash, internally referred to as “Skimaki,” potentially as early as Wednesday, featuring enhanced coding performance.
- Shares of GOOGL rose 0.6% during after-hours trading Tuesday following reports of the imminent model release.
- Internal evaluations revealed Google engineers favored Gemini 3.8 Flash over Anthropic’s Opus when tested with the Jetski evaluation tool.
- Google Cloud posted remarkable growth with revenue jumping 82% to $24.8 billion in Q2, while the backlog reached $514 billion.
- Analysts maintain a Strong Buy consensus on GOOGL shares, with average price targets around $426 suggesting approximately 26-27% potential upside.
Shares of Alphabet’s GOOGL climbed 0.6% during extended trading hours Tuesday following a Wall Street Journal report revealing Google’s plans to introduce a new artificial intelligence model named Gemini 3.8 Flash. The shares had declined approximately 1.3% during regular trading hours Tuesday.
The upcoming model, which bears the internal codename “Skimaki,” may debut as early as Wednesday. Its primary focus centers on enhancing Google’s coding performance, a domain where Gemini has lagged behind competitors including Anthropic and OpenAI in recent months.
Flash variants are engineered to operate with greater speed and reduced costs compared to Google’s most sophisticated AI systems. While less powerful than Google’s flagship models featuring trillions of parameters, they prioritize operational efficiency and rapid response times.
During internal evaluations, Google’s engineering team utilized a testing platform called Jetski to conduct comparative assessments. Results showed engineers consistently favored Gemini 3.8 Flash over Anthropic’s Opus. This represents a significant milestone considering the intensely competitive landscape of AI-powered coding solutions.
Throughout this year, Google has allocated increased research funding and computational resources toward coding initiatives. The company has simultaneously expanded its implementation of reinforcement learning, a training methodology where models enhance performance through iterative task completion and error correction.
Google’s AI Leadership Position Weakened Following Strong Start in Early 2026
Google made significant progress in the AI model competition following the November 2025 launch of Gemini 3.0, temporarily surpassing several competitors. However, this advantage was fleeting. By 2026, Gemini had lost ground to the newest releases from both Anthropic and OpenAI.
The competitive pressure continues mounting as AI-powered coding assistants establish themselves as among the most valuable commercial applications of the technology. While the 3.8 Flash release should strengthen Google’s competitive standing, industry analysts remain cautious about whether it will restore the company’s leadership position.
Year-to-date, GOOGL stock has appreciated roughly 8%, underperforming the S&P 500’s 12.7% advance during the comparable timeframe.
Core Operations and Cloud Division Demonstrate Robust Performance
Beyond the AI model competition, Alphabet’s fundamental business operations have delivered solid results. Google Search and related advertising revenue increased 17% year-over-year to $63.3 billion in Q2. Combined Google advertising revenue totaled $81.6 billion, representing a 14% gain.
Google Cloud delivered exceptional quarterly performance. Revenue soared 82% to $24.8 billion, while operating income hit $8.8 billion, more than tripling the prior-year result. The operating margin expanded significantly to 35.6% from 20.7%.
The Cloud division’s backlog increased by over $50 billion quarter-over-quarter to reach $514 billion. Management anticipates converting slightly more than half of this backlog into recognized revenue within the next 24 months.
The subscription business also contributed positively, with the Subscriptions, Platforms, and Devices segment growing 15% year-over-year to $12.9 billion in Q2, powered by YouTube Music, YouTube Premium, and Google One services.
Currently, twenty-eight Wall Street analysts assign GOOGL a Strong Buy rating, comprising 23 Buy recommendations and five Hold ratings. The consensus price target stands at approximately $426, suggesting potential upside of roughly 26-27% from present trading levels.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
