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After wrapping up its longest monthly losing streak on Wall Street in more than a decade, Google has started September by giving investors several reasons for optimism.
The company on Wednesday launched Gemini 3.8 Flash, its third Flash model in six weeks, alongside a new cybersecurity model aimed at trusted government and enterprise customers. Berkshire Hathaway CEO Greg Abel also offered a public vote of confidence for Alphabet's AI position.
Meanwhile, a federal judge on Wednesday rejected the Justice Department's push to force Google to sell its ad exchange, another victory for the company against the government's antitrust efforts.
Taken together, the developments offer a more constructive setup for Alphabet after a difficult summer, when Google lost some of its momentum in the AI model race, saw high-profile talent departures, and underwent a major restructuring inside DeepMind.
The stock hasn't yet shown much of a rebound. It rose 0.6% on Wednesday after dropping more than 1% Tuesday to start the month, so it's still down slightly as September gets going.
But Google is enthusiastic about Gemini 3.8 Flash, which is focused heavily on coding and agentic tasks — two of the areas where AI companies are increasingly trying to turn technological advances into enterprise revenue. Google calls it Gemini's best reasoning and coding model yet, with significant improvements over 3.7 Flash in software engineering and multi-step tasks.
Tulsee Doshi, senior director of product management at Google DeepMind, told CNBC the recent Flash models have "really surprised us in positive ways in their performance," adding that they "give us opportunities to lean into them."
Smaller Flash models are cheaper to run and faster to iterate than the company's largest frontier systems, while increasingly approaching them on some tasks. But it's not enough to get the company close to Anthropic or OpenAI, said Gil Luria, an analyst at D.A. Davidson, in an interview.
"From a product perspective this model seems to keep Google in the race, but probably won't change the fact they are a distant third in the enterprise market," said Luria, who recommends holding the stock.
Gemini 3.8 Flash costs 75 cents per million input tokens and $3.75 per million output tokens — the same introductory price as its last Flash model, even with the new one offering improvements in coding, agentic tasks and reasoning.
Gemini Enterprise is adding pay-as-you-go pricing, token discounts of up to 20%, monthly caps on agent spending and a zero-dollar base subscription option. According to materials provided to CNBC, Google has also directly targeted Microsoft and Anthropic, claiming their recurring seat fees and separate product licenses make their offerings more expensive and less flexible.
Google also has the benefit of scale. Nearly three-quarters of Google Cloud customers are already using its AI products, and Google Cloud CEO Thomas Kurian told CNBC that those customers are spending about 50% more than their original commitments.
DeepMind's Demis Hassabis has similarly described a future that plays to that strategy. Hassabis told the G20 Innovation meeting on Wednesday that Gemini could increasing…