Here's Why Alphabet Is the Best AI Stock to Buy Right Now
It's easy to get caught up in the latest hype, but investors shouldn't ignore a longtime leader in AI.
The possibility of interest rate cuts and ongoing inflationary pressures might draw investor attention. But nothing beats the excitement around artificial intelligence (AI). This has undoubtedly been the top market topic in the last year or so.
With shares soaring 404% since the start of 2023, Nvidia looks like it's the poster child of the AI boom. Thanks to its position as an infrastructure provider, investors probably view the business as the best way to play the trend.
But don't forget about the tech behemoth that is Alphabet (GOOGL -1.58%) (GOOG -1.51%). I think this top internet enterprise is the best AI stock to buy right now. Here's why.
Doing AI for a long time
The release of OpenAI's ChatGPT in late 2022 revitalized the discussion around AI and its potential to impact many different industries. This spurred companies to figure out ways to incorporate the technology into their own operations, hoping investors would reward this new focus.
However, it shouldn't come as a shock to anyone that Alphabet has long been prioritizing AI advancements. The company's top segment, Google Search, started using machine learning and AI capabilities as far back as 2001 to help users improve spelling when making search queries. There's no doubt that this focus helped make Alphabet the dominant company that it is today.
Google Search is arguably the single most important internet-based service in the world, mainly because it has become a gateway for users to find information. And its success is still critical to Alphabet today, as Search raked in $48 billion of revenue in the fourth quarter of 2023, representing 56% of the company's total.
CEO Sundar Pichai claimed in a 2016 blog post that Alphabet was no longer a mobile-first enterprise, but "AI-first" from that point forward. This meant creating "a world where computing becomes universally available."
I'd say the business has been successful in this regard. Many of Alphabet's products already incorporate AI. Gmail uses AI not only to help with spell check, but by also reducing spam. Google Cloud continues to integrate AI functionality into the various tools it offers clients, so that they can benefit from this revolutionary technology. And -- what I believe is an extremely neat feature -- Google Photos allows users to find an image they're looking for by searching what's in the picture.
