Potential interest rate cuts and continued inflationary pressures could attract investors’ attention. But nothing beats the excitement surrounding artificial intelligence (AI). This has definitely been the biggest topic in the market over the past year or so.
Since the beginning of 2023, the stock has soared 404%. Nvidia He seems to be a representative child of AI boom. Thanks to the company’s position as an infrastructure provider, investors see this business as perhaps the best way to ride the trend.
But don’t forget about the tech giants. alphabet (Google -1.58%) (GOOG -1.51%). I think this top internet company is the best AI stock to buy right now. Here’s why:
I’ve been working on AI for a long time.
The release of OpenAI’s ChatGPT in late 2022 has sparked a conversation about AI and its potential to impact various industries. This has led companies to look for ways to incorporate this technology into their operations in hopes that investors will reward this new focus.
But it shouldn’t come as a shock to anyone that Alphabet has long prioritized advances in AI. The company’s top segment, Google Search, is machine learning Dating back to 2001, the AI feature helps users improve their spelling when forming search queries. There’s no question that this effort has helped Alphabet become the powerful company it is today.
Google Search is probably the most important Internet-based service in the world. The main reason for this is that Google Search has become a gateway for users to find information. And that success remains crucial to Alphabet, as search generated his $48 billion in revenue, 56% of the company’s total, in the fourth quarter of 2023.
CEO Sundar Pichai claimed in a blog post in 2016 that Alphabet was no longer a mobile-first company, but would become an “AI-first” company from that point forward. This meant creating “a world where computing is universally available.”
In this respect, this business can be said to be successful. Many of Alphabet’s products already have AI built into them. Gmail uses AI to not only help with spell checking, but also to reduce spam. Google Cloud continues to integrate his AI capabilities into the various tools it provides to its clients so that they can benefit from this innovative technology. And what I think is a really cool feature is that Google Photos allows users to find the images they’re looking for by searching for what’s in the photo. These are just some examples.
Advantages of the alphabet
I have great confidence that 10 years from now, Alphabet will not only remain a leader in AI, but will also be able to set itself apart from other top companies in this space. It all has to do with Alphabet’s data advantage.
The company’s 15 products and services are used by more than 500 million people worldwide. In fact, google.com and youtube.com are his two most visited websites on the planet. So I would be surprised if there were other companies that collect more data than Alphabet.
This means the company can continuously train and improve its AI system. This creates a positive feedback loop where more data means better AI models, resulting in a better customer experience, increased usage, and more data collection. This is a powerful advantage for Alphabet.
Perhaps the company’s latest Generative AI modelGemini outperforms ChatGPT in numerous performance areas.
Looking at the valuation
In addition to the AI buzz, Alphabet’s attractive stock price makes it a smart investment.of FAANG stocks The price-to-earnings ratio (PER) is 25.6 times.
On the other hand, Nvidia’s PER is 97.2 times. To be fair, the chipmaker has posted tremendous growth. But investors appear to be pricing in the possibility that growth at this pace can continue indefinitely. And this will not be the case.
This makes Alphabet the best AI stock to buy right now, in my opinion.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Neil Patel and his clients have no positions in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
