It looks like GoPro Inc (NASDAQ:GPRO) investors were not ready for Alphabet’s jelly. The action camera maker’s shares are clanging down 6% after news broke that Google is setting loose an artificial intelligence (AI) camera called Clips- a smart-capture product that could knock GoPro out of the water.
Considering the stock has already lost over a third of its value in 2017 amid rivalry concerns as it is, Google’s new camera that offers to take snapshots and soundless videos for its users with stellar machine learning performance is the last thing the tech player needed. Keep in mind, this is a year that already saw GoPro stumble after its Karma drone saw a recall followed by a rebound launch and never recovered.
Perhaps GoPro was hoping last week’s pocket-sized Hero6 with 4K recording capabilities capturing 60 frames per second could lure positive sentiment back on its side. But then came Google’s announcement today that it has a fancy, easy, mobile gadget that will be hot out on the market.
Creepy or the kind of high-tech gadget for users craving to capture stolen moments ideally for parents not wanting to miss a single precious moment with their children and beloved pets? Google says Clips will be “coming soon,” a camera that will be able to capture “stable, clear shots” thanks to a facial recognition feature that lets the user drink in the moment without needing to press a shutter button in Alphabet’s debut standalone camera. GoPro does not have a camera that knows how to memorize faces, and Google has designed its camera so that a user can trail away, live life without the confines of having to take the photo or video, and there you have it- magic is recorded.
Google Clips product manager Juston Payne asks, “How do you let yourself capture those fleeting moments, while being part of the moment?” and proudly declares in a company blog post: “We hope Google Clips helps you capture more spontaneous moments in life, without any of the hassle,” as Alphabet’s products function “best when used at home with family and close friends.”
Even the price should have GoPro shareholders quaking. With Google Clips’ price tag of $249 up against GPRO’s Hero5 Session at a higher $299, which could be deemed a direct competitor for handsfree camera buyers, Alphabet’s shift from advertising to smart-capture camera making is derailing GoPro confidence today.
Wall Street certainly did not need more reason to be cautious on the tech player, as TipRanks analytics exhibit GPRO as a Hold. Out of 8 analysts polled by TipRanks in the last 3 months, 1 is bullish on GoPro stock, 5 remain sidelined, and 2 are bearish on the stock. With a loss potential of 9%, the stock’s consensus target price stands at $8.88.