Google parent Alphabet (GOOGL) shares rose 1.6% Monday after reports the company is developing a next-generation AI server chip called Frozen v2, expected to launch as early as 2028. The chip would run six to ten times more efficiently than current custom chips and respond to queries faster. Alphabet stated that its teams are constantly researching new innovations and that co-designing hardware and software ensures optimized systems. Despite the positive news, the next Gemini Pro release is delayed and several senior researchers have departed to rivals, as Chinese AI models now account for 45% of U.S. company token use. GOOGL stock has climbed 11% in 2026. Analysts remain bullish, with BMO Capital raising its price target on July 17.
Shares in Google parent Alphabet (GOOGL) climbed Monday after the company announced a new chip for its AI model is in development. According to reports, Google is developing a server chip called Frozen v2 designed to optimize its Gemini AI model, with a potential launch as soon as 2028.
The “Frozen” chip is separate from Google’s tensor processing units already in production. The new semiconductor would run six to ten times more efficiently and respond to queries more quickly than its current custom chips. Alphabet told CNBC in a statement that its teams are “constantly researching and experimenting with new innovations to deliver maximum performance and efficiency for our users and customers.” The company added, “By co-designing our hardware and software from the ground up, we ensure our systems are integrated and highly optimized for real-world workloads.”
GOOGL stock climbed 1.6% on Monday after the report, helping eat into the stock’s 5% decline since June 20. Despite the positive AI chip news, Google’s AI efforts face a more immediate challenge. The next Gemini Pro release is delayed, and Google has lost several senior researchers to rivals as Chinese models gain ground with American businesses.
Those models now account for 45% of U.S. company token use. With earnings on Wednesday, analysts are hopeful that a solid report and the new AI chip could spark a rally for GOOGL stock, which has climbed 11% in 2026. Analysts on Wall Street are bullish and have issued buy calls before the report. Financial institution BMO Capital last week doubled down on its price prediction on Alphabet stock (GOOGL). Brian Pitz, Managing Director, maintained his buy rating for GOOGL and increased the price target in a note to clients on July 17.
