Key Highlights
- Google plans to unveil Gemini 3.8 Flash, internally known as “Skimaki,” potentially as early as Wednesday, featuring enhanced coding functionality.
- GOOGL shares rose 0.6% during extended trading hours Tuesday following reports of the model’s imminent release.
- Internal evaluations showed Google’s engineers favored Gemini 3.8 Flash over Anthropic’s Opus model when tested with the Jetski platform.
- Google Cloud reported an 82% revenue jump to $24.8 billion in the second quarter, with total backlog reaching $514 billion.
- Analysts maintain a Strong Buy consensus on GOOGL, with average price targets around $426, suggesting approximately 26-27% potential upside.
Shares of Alphabet’s GOOGL climbed 0.6% during after-hours trading Tuesday following a Wall Street Journal report revealing Google’s plans to introduce a new artificial intelligence model named Gemini 3.8 Flash. The stock had declined nearly 1.3% during the regular trading session that day.
Bearing the internal codename “Skimaki,” the model may debut as early as Wednesday. Its primary focus centers on enhancing Google’s coding performance, a segment where Gemini has lagged behind competitors from Anthropic and OpenAI in recent quarters.
Flash variants are engineered to operate more rapidly and cost-effectively compared to Google’s most robust AI systems. While they lack the full capabilities of Google’s heavyweight models containing trillions of parameters, they prioritize processing speed and operational efficiency.
During internal evaluations, Google’s engineering team deployed a platform named Jetski to conduct comparative assessments. Results from these tests indicated engineers favored Gemini 3.8 Flash when pitted against Anthropic’s Opus. This represents a significant milestone considering the intensely competitive landscape of AI-powered coding solutions.
Throughout this year, Google has channeled additional research efforts and computational power toward coding initiatives. The company has simultaneously broadened its application of reinforcement learning, a training methodology enabling models to enhance performance through iterative task completion and error correction.
Google’s AI Advantage Diminished Following Early 2026 Success
Google made substantial progress in the AI development competition after introducing Gemini 3.0 in November 2025, temporarily surpassing several rivals. However, this competitive edge proved fleeting. By 2026, Gemini had dropped behind the newest offerings from both Anthropic and OpenAI.
The competition intensifies as AI-driven coding assistants establish themselves as among the most significant commercial applications of this technology. While the 3.8 Flash debut may strengthen Google’s competitive standing, market observers don’t anticipate it will immediately restore the company to industry leadership.
GOOGL shares have advanced approximately 8% year-to-date, underperforming the S&P 500’s 12.7% increase during the comparable timeframe.
Core Operations and Cloud Division Demonstrate Robust Performance
Beyond the AI model competition, Alphabet’s fundamental operations have delivered solid results. Google Search combined with other advertising streams increased 17% year-over-year to $63.3 billion in the second quarter. 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 reached $8.8 billion, exceeding the prior-year figure by more than threefold. Operating margin expanded to 35.6% from 20.7%.
The Cloud division’s backlog increased by over $50 billion quarter-over-quarter to $514 billion. Alphabet anticipates converting just over half of that figure into revenue within the coming 24 months.
The subscription business also made positive contributions, with the Subscriptions, Platforms, and Devices segment advancing 15% year-over-year to $12.9 billion in Q2, propelled 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, indicating roughly 26-27% upside potential 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
