The stock market has been abuzz with the artificial intelligence (AI) boom, and for good reason. The S&P 500 has advanced 55% in the last two years, and AI promises to drive more upside in the coming years as it boosts productivity and efficiency across industries.
A Transformative Event
Experts have compared AI to transformative events like the creation of the microprocessor, the personal computer, and the internet. Technological shifts of that magnitude come along maybe once in a decade, and investors who want to benefit from the AI boom should be buying stocks today.
The Agentic AI Market
Wall Street is currently fixated on AI agents, which differ slightly from traditional AI copilots. The agentic AI market is projected to increase at 45% annually through 2030, according to Grand View Research. Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is well-positioned to capitalize on that spending, and the stock price is quite attractive.
Why Alphabet is My Pick for the Best AI Stock to Buy Right Now
AI agents will augment human workforces in the future. The precise definition of artificial intelligence (AI) agent varies depending on the source, and often overlaps with the description of traditional AI copilots. But the basic difference is this: Traditional AI copilots can do simple things like summarize service issues and suggest solutions, whereas AI agents can handle more complex tasks like fixing customer service issues without assistance.
Experts envision a future where most enterprises augment human employees with teams of AI agents, which will essentially function as digital workers assigned to specific tasks. Nvidia CEO Jensen Huang in a recent interview said his company may someday employ 50,000 people, but it will have 100 million AI agents working under those employees.
Alphabet: A Recognized Technology Leader in AI Cloud Services
Alphabet-subsidiary Google is a long-standing leader in AI research, and the company is using that expertise to create new monetization opportunities across its advertising and cloud businesses. For instance, generative AI overviews in Google Search are increasing usage and satisfaction, which further cements its leadership in search advertising.
However, Google’s largest and most compelling opportunity lies in cloud computing. In the past year, Forrester Research has recognized the company as leader in AI infrastructure solutions, machine learning platforms, and foundational large language models. In one report, analyst Mike Gualtieri commented, ‘Google is the best positioned hyperscaler for AI. Google has enough differentiation in AI from other hyperscalers that enterprises may decide to migrate from their existing hyperscaler to Google.’
Cloud Computing: A Key Driver of Alphabet’s Growth
Google is currently the third largest public cloud in terms of revenue. The company accounted for 13% of cloud infrastructure and platform services spending in the third quarter, while Amazon and Microsoft accounted for 31% and 20%, respectively. But Google gained a percentage point of market share during the last year as its AI business expanded.
Nearly 90% of generative AI unicorns are Google Cloud customers. The company could continue to gain market share in cloud services as enterprises lean into agentic AI. Google earlier this year added agent-building capabilities to Vertex AI, which will enable developers to build custom AI models and integrate them with other cloud services.
A Compelling Investment Opportunity
Alphabet’s stock price has been volatile in recent months, but the company’s strong fundamentals and growing presence in the AI market make it an attractive investment opportunity. With a strong track record of innovation and a leadership position in the AI market, Alphabet is well-positioned to drive growth and profitability in the coming years.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends InterContinental Hotels Group Plc and 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.
Conclusion
The AI boom is a once-in-a-decade investment opportunity that should not be missed. With Alphabet’s strong fundamentals, growing presence in the AI market, and leadership position in cloud computing, it is an attractive investment opportunity for investors looking to benefit from this transformative event.
As always, do your own research and consider consulting with a financial advisor before making any investment decisions.
