Alright folks, let’s get into it. So we all know about Google, right? The king of search engines, founded back in ’98. Well, as time went on, Google started to dominate the tech industry even more. And to keep up with its diverse business ventures, the company created a parent organization called Alphabet in 2015. This bad boy is home to Google Search, as well as other big players like Google Cloud and YouTube. Together, they’ve amassed a market cap of a whopping $1.7 trillion, making Alphabet the third-largest company in the good ol’ U.S. of A.
But hold up, because this year, Alphabet has shifted its focus to something big: artificial intelligence, or AI for short. They’re integrating this technology into their product lineup, and it’s got the potential to seriously boost their growth in the long run. So strap in and listen up, ’cause I’m gonna tell you why you might wanna consider investing in Alphabet stock right now. You don’t wanna look back in a few years and regret not jumpin’ on this train.
Now, things got a little bumpy for Alphabet in early 2023. See, their arch-rival Microsoft decided to go all-in on AI. They made a hefty $10 billion investment in OpenAI, the brains behind ChatGPT, and integrated this chatbot into their Bing search engine. People started freakin’ out, thinking that Microsoft might finally be able to take a chunk out of Google Search’s 92% market share. But you know what? Turns out those worries were mostly blown out of proportion. But hey, that doesn’t mean there aren’t risks ahead.
Here’s the deal: chatbots are a more efficient way for folks to find information. Instead of sifting through multiple web pages, you can just type in your question and get a direct answer. It’s convenient, plain and simple. So what did Alphabet do? Well, they took advantage of their AI expertise to release their very own chatbot called Bard. But they didn’t stop there. They also introduced AI-generated responses to their traditional Google Search platform. Now, when you type in a query, you often get a text-based response right at the top of the page, savin’ you the trouble of clickin’ through different websites. And let me tell you, this is a big deal because Google Search is Alphabet’s cash cow. They need to keep that traffic flowin’ to entice advertisers to spend their hard-earned cash.
But wait, there’s more! In August, Alphabet unveiled a slick new product called Duet AI. It’s kinda like Microsoft’s Copilot feature, but it’s specifically designed for businesses. Duet AI integrates with Google Workspace and Google Cloud to help workers generate all sorts of content. Think reports, presentations, you name it. And here’s the kicker: it doesn’t harvest data, so it’s safer for businesses to use in commercial settings.
Now, let’s talk about the cloud. Google Cloud is goin’ head-to-head with the likes of Microsoft and Amazon. It may be the smallest of the three major cloud providers, but it’s packin’ a punch in the AI department. See, AI models need big ol’ data centers, and Google Cloud’s got ’em. They even built their own hardware, called tensor processing units (TPUs), which are designed to whip through large matrix operations and speed up machine-learning models. And get this – over 70% of AI start-ups worth a billion dollars or more are Google Cloud customers. That’s a pretty big deal, my friends.
And the numbers don’t lie. In the most recent quarter, Google Cloud pulled in a cool $8 billion, representing a 28% year-over-year increase. That growth outpaced Microsoft’s Azure and blew Amazon Web Services out of the water. It’s clear that Google is gainin’ some serious ground in the cloud market.
But enough numbers, let’s get to the good stuff. Why should you care about all this AI talk, you ask? Well, let me drop some knowledge on ya. Alphabet is sittin’ pretty as the third-largest company in the U.S., only behind Apple and Microsoft. But here’s the kicker – Alphabet’s stock is actually cheaper than both Apple and Microsoft when you look at their price-to-earnings (P/E) ratios. It’s also cheaper than the Nasdaq-100 index. And that’s just mind-boggling, considering the potential impact of AI on the global economy.
Research firm McKinsey predicts that AI will add a mind-blowing $13 trillion to the global economy by 2030. And get this – 70% of businesses worldwide are gonna be using AI. That’s a lot of demand, my friends. And who do you think they’ll turn to for all their AI needs? You guessed it – platforms like Google Cloud.
But wait, there’s more. Ark Investment Management, led by tech guru Cathie Wood, believes that AI could add a jaw-dropping $200 trillion to the global economy by 2030. That’s trillion with a “T,” folks. And they’re sayin’ that AI software alone could generate a whopping $14 trillion in revenue. Now that’s what I call a goldmine.
So here’s the bottom line – Alphabet is goin’ all-in on AI, and they’re in a prime position to rake in some serious dough. Their stock is cheaper than their competitors’, and the projections for AI’s impact on the global economy are off the charts. So if you’re lookin’ to invest, do yourself a favor and give Alphabet some serious consideration. You’ll thank me later.