(Bloomberg) -- Alphabet Inc. investors are anxiously awaiting a Google hardware event on Tuesday — banking on new AI features to help stop a selloff that’s wiped out more than $360 billion in market value in just one month.

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Google is unveiling one of the biggest redesigns of its Pixel phones in their nearly decade-long history at an event starting at 10 a.m. in Mountain View, California. While the devices are usually an afterthought for investors because of their small revenue contribution relative to Google’s digital advertising business, expectations are high that new AI capabilities could demonstrate leadership in the highly competitive arena.

“We’re hoping to get some solid information about the Google AI product to help turn around this period of profit taking,” said Tim Ghriskey, a senior portfolio strategist at Ingalls & Snyder LLC. “It’s very helpful for investors to hear news like this and generally most of the time it’s positive news and helps the stock.”

A boost is much needed. Alphabet shares have fallen 15% from a high in mid-July. They’ve come under pressure along with other megacaps amid concerns about slowing economic growth in the US and lofty valuations, while investors are increasingly worried that there’s relatively little to show for heavy spending on AI. Alphabet shares fell after second-quarter capital spending came in higher than expected as the company strives to outmatch rivals in AI.

Over the past year, the perception of Google’s position in the race to deploy generative AI technologies has been critical to its stock performance. In February, Alphabet shares dropped more than 4% in a single day when Google paused image generation for its Gemini AI model after producing inaccurate historical depictions. In April, the stock rallied after unveiling updates to AI offerings for cloud customers.

At Tuesday’s event, Alphabet is expected to show more on-device AI offerings, driven by native integration of its Gemini large language model for text, image and voice-level features, according to Bloomberg Intelligence. “Advantages for Google’s Android in owning its foundational large language model are being highlighted by the delayed rollout of Apple Intelligence features, such as its integration with ChatGPT in version 18.1 of iOS,” analyst Mandeep Singh wrote.

Alphabet’s recent selloff has left the stock hovering around the cheapest since March. It’s priced at 19 times profits projected over the next 12 months, down from a high of nearly 24 times last month, according to data compiled by Bloomberg. That’s at a discount to the average multiple in the S&P 500, which sits around 20.5 times. Shares in the company rose as much as 1.5% in early trading on Tuesday.

“The stock is pretty cheap for the massive free cash flow machine they are,” said Eric Clark, portfolio manager at Accuvest Global Advisors Inc. “New AI will enhance the margin profile for ads and allow better pricing as we saw with Meta.”

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--With assistance from Mark Gurman and Subrat Patnaik.

(Updates to add stock move in seventh paragraph.)

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