Latest news with #Alphabet
Yahoo
an hour ago
- Business
- Yahoo
Meet the Unstoppable Stock That Could Join Nvidia, Microsoft, and Apple in the $3 Trillion Club
Key Points Nine American companies are currently worth $1 trillion or more, but just three have graduated into the $3 trillion club. Alphabet owns businesses like Google Search and Google Cloud, where revenue growth is currently accelerating thanks to artificial intelligence (AI). Alphabet stock is trading at a very attractive valuation, which sets the stage for a potential move into the $3 trillion club. 10 stocks we like better than Alphabet › The U.S. is home to nine companies with market capitalizations of $1 trillion or more, but only three have surpassed the ultra-exclusive $3 trillion milestone: Nvidia: $4.2 trillion Microsoft: $3.8 trillion Apple: $3.2 trillion I think another might be set to join them. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the parent company of Google, and it's fast becoming a leader in the artificial intelligence (AI) race. The company had a market capitalization of $2.3 trillion as of market close on July 25, but its recent financial results and the valuation of its stock might support a move into the $3 trillion club in the near future. If Alphabet does cross the exclusive milestone, investors who buy its stock today could earn a return of over 30%. AI is reshaping Google Search Google Search is Alphabet's most important business, because it consistently represents more than half of the tech conglomerate's total revenue. A few years ago, investors were worried AI chatbots like OpenAI's ChatGPT would filter traffic away from Google Search, hampering its ability to generate revenue through advertising. But it seems those concerns were overblown. Google Search generated a record $54.2 billion in revenue during the second quarter of 2025 (ended June 30), which was up 11.7% compared to the year-ago period. That marked an acceleration from its first-quarter growth of 9.8%, which suggests the search business is gathering momentum. AI is a big reason why. Alphabet developed its own family of large language models (LLMs) called Gemini, and it used them to create a new Google Search feature called AI Overviews. They use text, images, and links to third-party sources to craft complete responses to queries, saving users from having to sift through web pages to find the information they need. This creates a far more convenient experience. Alphabet said 2 billion people were using AI Overviews every month during the second quarter, and since they monetize at the same rate as traditional Google Search results, they aren't cannibalizing the company's core business. Overviews are also driving higher Google Search usage, because they encourage users to refine their queries to generate the most accurate outputs. Alphabet also launched a stand-alone AI chatbot called Gemini to capture traffic from users who prefer to seek information that way. Moreover, the company just rolled out "AI Mode" for Google Search, which introduces a chatbot-style interface to the traditional search experience. Alphabet hopes these tools will keep users within Google's ecosystem, and stop them from experimenting with the competition. Google Cloud revenue growth is also accelerating Google Cloud is consistently Alphabet's fastest-growing business, and the second quarter was no exception. The segment generated a record $13.6 billion in revenue, which was up by a whopping 32% year over year. That marked an acceleration from the first quarter, when revenue grew by 28%. AI is driving that momentum. Google Cloud operates industry-leading data centers fitted with powerful AI graphics processors (GPUs) from Nvidia, and also tensor processors (TPUs), which it designed in-house. This optionality makes the Google Cloud platform attractive to AI developers of all sizes, which is why nearly all AI unicorns (AI start-ups worth $1 billion or more) are using it. Google Cloud also offers access to hundreds of ready-made LLMs, including Gemini, which developers can use to create AI software much faster than if they had to train their own models from scratch. Alphabet said more than 85,000 enterprises are now building AI applications with Gemini models, resulting in a staggering year-over-year increase in usage of 35 times during the second quarter. Alphabet CFO Anat Ashkenazi said Google Cloud's order backlog soared 38% year over year to a whopping $106 billion, which means demand for computing capacity continues to outstrip supply. To convert that backlog into revenue, the company needs to build more data centers, which is why it just increased its capital expenditures (capex) forecast for 2025 to $85 billion, from $75 billion previously. Alphabet's (mathematical) path to the $3 trillion club Alphabet's earnings per share (EPS) climbed by 22% year over year in the second quarter to come in at $2.31. The company's trailing-12-month EPS now stands at $9.39, which places its stock at a price-to-earnings (P/E) ratio of 20.6. That's a steep discount to the Nasdaq-100 technology index, which hosts all of Alphabet's big-tech peers, and trades at a P/E ratio of 32.5. It also makes Alphabet the cheapest stock in the "Magnificent Seven," a group of tech giants leading the way in different segments of the AI race. Alphabet stock would have to soar by 83% just to trade in line with the median P/E ratio of the Magnificent Seven stocks (37.8), which would catapult its market cap to $4.2 trillion. Even if its stock climbed by 58% so its P/E matched that of the Nasdaq-100, it would still be enough to push the company's valuation way above $3 trillion. One thing suppressing Alphabet's P/E ratio right now is the ongoing legal battle with the U.S. Department of Justice (DOJ). The agency won a lawsuit last year that determined Alphabet used monopolistic practices to protect its market share in the internet search industry. For example, the company was paying Apple handsome annual fees to make Google the default search engine on devices like the iPhone, making it nearly impossible for competitors to make inroads. A judge is expected to hand down Alphabet's punishment in August. It could be a simple financial penalty, or the company might be forced to sell parts of its business to level the competitive playing field. Any remedy that diminishes the dominance of Google Search could harm Alphabet's earnings potential, which is why investors are tentative. However, there is likely to be a lengthy appeals process, which could tie the matter up in court for several more years. In the here-and-now, I think Alphabet stock is a bargain based on its incredible progress in the AI space alone, especially as it relates to Google Cloud, which isn't facing regulatory scrutiny right now. As a result, I think Alphabet has a pathway to the $3 trillion club in the next year or so, irrespective of the legal overhang. Should you buy stock in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Meet the Unstoppable Stock That Could Join Nvidia, Microsoft, and Apple in the $3 Trillion Club was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNA
an hour ago
- Business
- CNA
Big Tech may be breaking the bank for AI, but investors love it
Big Tech is spending more than ever on artificial intelligence - but the returns are rising too, and investors are buying in. AI played a bigger role in driving demand across internet search, digital advertising and cloud computing in the April-June quarter, powering revenue growth at technology giants Microsoft, Meta, and Alphabet. Betting that momentum will sustain, Microsoft and Alphabet decided to ramp up spending to ease capacity shortages that have limited their ability to meet soaring AI services demand, even after several quarters of multi-billion-dollar outlays. The results offer the clearest sign yet that AI is emerging as a primary growth engine, although the monetization journey is still in its early days, investors and analysts said. The upbeat commentary also bodes well for the largest U.S. cloud provider, which will report earnings on Thursday after markets close, and underscores how surging demand for the new technology is shielding the tech giants from tariff-driven economic uncertainty hobbling other sectors. "As companies like Alphabet and Meta race to deliver on the promise of AI, capital expenditures are shockingly high and will remain elevated for the foreseeable future," said Debra Aho Williamson, founder and chief analyst at Sonata Insights. But if their core businesses remain strong, "it will buy them more time with investors and provide confidence that the billions being spent on infrastructure, talent and other tech-related expenses will be worthwhile," she added. Microsoft shares rose about 9 per cent in premarket trading on Thursday, with the Windows maker poised to cross $4 trillion in market value - a milestone only chip giant Nvidia has reached so far. Meta was up even more, rising 11.3 per cent and on course to add nearly $200 billion to its market value of $1.75 trillion. Amazon gained around 3 per cent. All the companies have faced intense scrutiny from investors over their ballooning capital expenditures, which were expected to total $330 billion this year before the latest earnings. And until a few days ago, the Magnificent Seven stocks were also trailing the S&P 500 in year-to-date performance. SILENCING DOUBTS Microsoft said on Wednesday it would spend a record $30 billion in the current quarter, after better-than-expected sales and an above-estimate forecast for its Azure cloud computing business showcased the growing returns on its massive AI bets. The prediction puts Microsoft on track to potentially outspend its rivals over the next year. It came after Google-parent Alphabet beat revenue expectations and raised its spending forecast by $10 billion to $85 billion for the year. Microsoft also disclosed for the first time the dollar figure for Azure sales and the number of users for its Copilot AI tools, whose adoption has long been a concern for investors. It said Azure generated more than $75 billion in sales in its last fiscal year, while Copilot tools had over 100 million users. Overall, around 800 million customers use AI tools peppered across Microsoft's sprawling software empire. "It's the kind of result that quickly silences any doubts about cloud or AI demand," said Josh Gilbert, market analyst at eToro. "Microsoft is more than justifying its spending." Other AI companies have also attracted a clutch of users. Alphabet said last week its Gemini AI assistant app has more than 450 million monthly active users. OpenAI's ChatGPT, the application credited with kicking off the generative AI frenzy, has around 500 million weekly active users. Meta, meanwhile, raised the bottom end of its annual capital expenditure forecast by $2 billion, to a range of between $66 billion and $72 billion. It also said that costs driven by its efforts to catch up in Silicon Valley's intensifying AI race would push 2026 expense growth rate above 2025's pace. Better-than-expected sales growth in the April-June period and an above-estimate revenue forecast for the current quarter, however, assured investors that strength in the social media giant's core advertising business can support the massive outlays. "The big boys are back," said Brian Mulberry, portfolio manager at Zacks Investment Management, which holds shares in all three major U.S. cloud providers. "This simply proves the Magnificent Seven is still magnificent at this moment in time."
India.com
2 hours ago
- Business
- India.com
Rs 526000000000: Sundar Pichai Google to make huge investment in India, Asia's largest data centre to be built in..., to provide jobs to...
Rs 526000000000: Sundar Pichai Google to make huge investment in India, Asia's largest data centre to be built in…, to provide jobs to… Google's Mega Investment: What comes as a major development from the United States tech giant Google is that the company is going to invest USD 6 billion (approx Rs 525,814,728,000) in India. The company will invest USD 6 billion to build a massive data centre and its power infrastructure in Andhra Pradesh. The capacity of the data centre will be 1 gigawatt. Notably, it is the Alphabet unit's first mega investment in the country, The Hindu reported, citing government sources. First Investment Of Its Kind As per reports, the mega data centre will be built in Visakhapatnam and the investment includes USD 2billion in renewable energy. This energy will be used to power the massive facility, Reuters reported, citing Andhra Pradesh government sources. Asia's Largest Data Centre The facility will be one of its kind and will be the largest in capacity in Asia. This is a part of a multi-billion-dollar expansion of the search giant's data centre portfolio across the Asia-Pacific region, including countries like Singapore, Malaysia, and Thailand. Google's parent company, Alphabet, recently stated that it is committed to spending approx USD 75 billion in 2025 to build data centre capacity despite the economic uncertainty due to Donald Trump's tariffs. No Official Confirmation About The Investment There is no official confirmation about Google's investment plan in India. Alphabet did not immediately respond to Reuters' regarding the plan. Andhra Pradesh's information technology minister Nara Lokesh, who is on Singapore visit, restricted himself from comment. He is in Singapore visit to discuss investments with the Singapore government and other business leaders. Why Is This Investment Important? Earlier, US President Donald Trump requested that American companies not recruit tech professionals from India. Apart from this, he is constantly pressurizing to invest in America. Trump has also threatened Apple, as the company has recently increased its production in India. The tech giant is now manufacturing its latest iPhones in India. The data centre will also create new job opportunities of all types for the youth.
Yahoo
3 hours ago
- Business
- Yahoo
1 Reason to Buy Alphabet
Key Points Alphabet's massive market cap and huge revenue base make it one of the most closely watched businesses. As a stand-alone company, YouTube might be worth more than Netflix. The current valuation presents investors with a buying opportunity. 10 stocks we like better than Alphabet › Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is a $2.3 trillion business that generated a whopping $96 billion in revenue in the latest quarter. This is a massive internet enterprise that has its hands in all areas related to technology. And it should continue to be a dominant force. As of July 25, shares trade at a very compelling forward price-to-earnings ratio of 20.2. The valuation supports one key reason that investors should consider buying this "Magnificent Seven" stock right now. Press play on YouTube This high-quality company deserves a spot in your portfolio because it appears to be undervalued. Looking at different segments paints a clearer picture. YouTube provides a perfect example. The video streaming service has an estimated 2.5 billion monthly users. It raked in $9.8 billion just in ad revenue in the second quarter, a figure that excludes subscription sales -- an important factor. And even better, as a two-sided platform, YouTube possesses a very powerful network effect. Netflix currently sports a market cap of $502 billion. It's easy to argue that YouTube is worth at least this much, if not more. The latter commands 12.8% of daily TV viewing time in the U.S., well ahead of Netflix's 8.3% share. Other parts of the empire Alphabet has other operating segments under the hood. There's Google Search, the company's crown jewel that represented 56% of total revenue in Q2. Don't forget about Android and Chrome. And Waymo, the autonomous driving division, could be a major financial contributor if adoption continues to grow. If regulatory actions force the company to break up, investors might still win out in the end. Of course, these different platforms all work better together, with technological know-how, data, and other resources being shared between them to make the whole business stronger. Nonetheless, Alphabet's attractive valuation is a top reason to buy shares. Do the experts think Alphabet is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Alphabet make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,046% vs. just 183% for the S&P — that is beating the market by 863.34%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Netflix. The Motley Fool has a disclosure policy. 1 Reason to Buy Alphabet was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Globe and Mail
3 hours ago
- Business
- Globe and Mail
2 Cheap AI Stocks You Can Buy Now and Hold Long-Term
Artificial intelligence stocks are soaring, making it more challenging to find undervalued stocks in this category. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » *Stock prices used were the afternoon prices of July 28, 2025. The video was published on July 30, 2025. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Parkev Tatevosian, CFA has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and International Business Machines. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
