Will AI create the world’s first trillionaire?<\/strong> Our team just released a report on a little-known company, called an “Indispensable Monopoly,” providing the critical technology Nvidia and Intel both need. <\/p>\n Continue \u00bb<\/strong><\/a> <\/p>\n<\/td>\n<\/tr>\n When Alphabet stock sank below $170 last year, one of the main reasons was the concern that Google Search was vulnerable to AI. Instead, Alphabet has turned AI into a strength.<\/p>\n Google incorporated AI Overviews, and last July, Google CEO Sundar Pichai reported that these AI Overviews had over 2 billion users per month. There’s been no indication that AI chatbots have damaged Google Search financially, either. Google Search revenue increased by 19% year over year to $60.4 billion in the first quarter of 2026.<\/p>\n Google also improved its own AI assistant, Gemini, making it more competitive with ChatGPT and Claude. While I still personally prefer Claude, Gemini has clearly gotten much better over the last year, and that’s reflected in usage.<\/p>\n The Gemini app has over 750 million monthly active users. In the first quarter, Alphabet reported that its first-party models processed more than 16 billion tokens per minute via direct API use from customers, a 60% increase from the previous quarter.<\/p>\n What sets Alphabet apart from other top AI stocks<\/a> is that it controls its entire AI stack. It has its own custom silicon, AI models, cloud computing, and a distribution layer through its existing products. This full-stack approach makes Alphabet far less reliant on other AI companies and is why I feel most confident in its long-term success.<\/p>\n A successful conglomerate at a reasonable price <\/p>\n Google Search is Alphabet’s biggest revenue driver, but the company has several successful businesses. Google Cloud made $20 billion in sales in Q1 2026, a 63% year-over-year increase, and its backlog nearly doubled from the previous quarter to over $460 billion.<\/p>\n Story Continues <\/p>\n It also owns YouTube, and while ad revenue from that is a solid $9.9 billion, another benefit is that it gets users to sign up for premium plans. Pichai said that YouTube is a key driver behind Google’s 350 million paid subscriptions, which doesn’t surprise me. YouTube Premium is easily the subscription service I use the most and the last one I’d want to cut.<\/p>\n Another business worth mentioning is Waymo, Alphabet’s autonomous driving technology company. It surpassed 500,000 paid robotaxi rides per week in the first quarter, and after a $16 billion investment round, it’s now valued at $126 billion.<\/p>\n Because Alphabet’s share price has increased so much, the question often arises: Is it still a good investment? The valuation actually isn’t particularly expensive, especially for one of the leading tech stocks<\/a>. Alphabet trades at 27 times forward earnings, comparable to Nvidia<\/strong> at 26 times forward earnings. Its trailing price\/earnings-to-growth (PEG) ratio is below 0.7, indicating it’s undervalued relative to its earnings growth.<\/p>\n What about the risks? <\/p>\n The biggest worry with Alphabet is the same one investors have about all the major hyperscalers: massive capital expenditures (capex). In its first-quarter earnings call, Alphabet raised capex guidance for 2026 to between $180 billion and $190 billion.<\/p>\n This has become par for the course with companies building AI data centers. Combined, the four major hyperscalers (Alphabet, Amazon<\/strong>, Meta Platforms<\/strong>, and Microsoft<\/strong>) forecast $600 billion to $700 billion in capex spending in 2026, according to recent research by The Motley Fool.<\/p>\n Even for a profitable business like Alphabet, this kind of spending will drain its free cash flow ($64.4 billion over the trailing 12 months). If revenue from AI products and services falls short of expectations, the company’s spending could prove a costly mistake.<\/p>\n To be honest, I’m not worried about Alphabet’s capex spending. Demand for computing power is skyrocketing, and AI data centers can become another source of revenue. In April, Anthropic signed a partnership with Google and Broadcom<\/strong> for computing capacity, and earlier this month, it committed to spending $200 billion with Google Cloud over five years.<\/p>\n No company is a sure investment. But with its AI-powered growth and all the successful businesses under its umbrella, Alphabet is the one I trust the most to continue compounding over the next three decades.<\/p>\n Should you buy stock in Alphabet right now? <\/p>\n Before you buy stock in Alphabet, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the\u00a010 best stocks<\/a><\/strong> for investors to buy now\u2026 and Alphabet wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix<\/strong> made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you\u2019d have $477,813<\/strong>!* Or when Nvidia<\/strong> made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,320,088<\/strong>!*<\/p>\n Now, it\u2019s worth noting\u00a0Stock Advisor\u2019s total average return is 986% \u2014 a market-crushing outperformance compared to 208% for the S&P 500.\u00a0Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built by individual investors for individual investors.<\/strong><\/p>\n See the 10 stocks \u00bb<\/strong><\/a><\/p>\n *Stock Advisor returns as of May 24, 2026. <\/p>\n Lyle Daly<\/a> has positions in Alphabet, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy<\/a>.<\/p>\n![\"The](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/05\/ce7de30cf7b2ba1c253451a725087a89.png\")
Image source: The Motley Fool. Alphabet has all the tools to win the AI race <\/p>\n