This dominant Internet enterprise has been working on this technology for decades, so it's nothing new to artificial intelligence (AI).
The ability to generate very large profits can help you build AI infrastructure by funding large investments.
The stock is trading at a 22% discount on the S&P 500, a transaction that should not be overlooked.
10 stocks we are better than Alphabet›
The artificial intelligence (AI) boom shows no signs of disappointment. The executive team wants to leverage this technology, but employees are worried about how it will affect their work. And there are investors who continue to look for ways to profit from this trend.
Choosing the right business can be a boon for your portfolio. If you have $3,000 ready to invest now, this is one AI Stock Buy and hold for a long time.
Image source: Getty Images.
“We're moving from mobile-first to the AI-First world,” CEO Sundar Pichai alphabet's (NASDAQ: Google)(NASDAQ: GOOG) The Google Division at the time said in a letter to its shareholders in 2015. This was to outline a fresh strategic focus and perspective of a high-tech environment. Looking back at the benefits of hindsight, it is very surprising how visionary this perspective is.
If it returns further, Google used machine learning capabilities in 2001 to help users spell within popular search engines. It looks like everyone else is finally coming to the AI trend, but the alphabet has been working on this technology for quite some time.
This has been more notable recently, with a variety of platforms leveraging AI to provide services that are suitable for users. For example, searching allows users to query the camera, maps use AI to provide traffic information, and YouTube can create captions for content creators. These are clear examples of AI that can help improve the user experience.
At the developer meeting in May, the notable update Alphabet announced was Agent Mode. The soon-to-release tool can handle complex, multi-step tasks from start to finish by carrying out a variety of activities, such as web surfing and deep research.
WaymoAlphabet's autonomous vehicles (AVs) and Robotaxi units also lean heavily towards AI when completing the vehicle and ensuring a safe trip. It is also used for training and advancement in AV Tech.
Perhaps there is no segment that doesn't have as much opportunity for AI as Google Cloud. Cloud computing is the main growth market as more costs are migrating from the field to off-premises. This provided a tail fin. However, Google Cloud becomes even more important as a vendor, as more companies realize they need to incorporate AI into their operations.
In the first quarter of 2025, 74% of Alphabet's revenue, or $67 billion, came from digital advertising efforts. AI is helping these key customers, for example, by building automated advertising campaigns in budget-friendly ways.
The alphabet is undoubtedly an all-in AI transition. We are working on this technology to not only improve our existing products and services, but also create whole new tools to help our users and customers benefit. Its strategic focus positions it well for the future.
Based on these factors, if you are beginning to think that the alphabet is the best AI stock to own, you can understand. However, there are other reasons to appreciate this business and opportunities.
The alphabet is in an incredible financial position. Even after a significant capital expenditure of $53 billion was made in 2024, the company was still able to bring in $73 billion. Free cash flow. It generates incredible revenue and keeps you cultivated more money into servers, data centers and more. Critics will say this is a waste of spending, but that is a risk worth taking to ensure that the business stays ahead of the curve.
It's also difficult to ignore the current evaluation. At the time of this writing, the stock is trading at a positive price of 17.5 and a rate of return. This multiple represents a total discount of 22% S&P 500. All this is a wise move to invest $3,000 in today's stock and hold it in the long term.
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Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Neil Patel has no position in any of the stocks mentioned. Motley Fool is located in Alphabet and recommended. Motley Fools have a disclosure policy.
Have you got $3,000? One AI (AI) Stock to buy and hold over a long period of time. Originally published by The Motley Fool
