By zooming out, it becomes obvious that Alphabet (GOOGL -0.01%) (GOOG 0.06%) has been a huge winner for investors. Shares have surged 144% in the past five years, and they’re up an impressive 525% just in the last decade. Becoming a dominant internet enterprise has resulted in some very happy shareholders.

But as of this writing on May 28, this top technology stock trades 16% below its high, which was reached on Feb. 4. Should you take advantage of the market’s pessimism and buy the dip on Alphabet right now?

Image source: Alphabet.

Is AI a risk or an opportunity?

With the proliferation of generative artificial intelligence (AI) tools in recent years, investors have rightfully been concerned that Alphabet’s crown jewel, Google Search, that represented 56% of sales in the first quarter, would be disrupted. That’s because it’s believed that users would turn more to AI when seeking out information on a variety of topics, pulling traffic away from Google Search. In turn, this could negatively impact advertising revenue.

So far, it appears these fears are overblown. First off, Google Search still commands a whopping 90% of global market share when it comes to search engines. Additionally, Google Search saw revenue increase 10% year over year in Q1. And that $50.7 billion sales figure is up 28% from the same period three years ago.

Lastly, it’s worth pointing out that Alphabet isn’t resting on its laurels. The company has clearly made AI a top priority. At its annual Google I/O developer conference in May, Alphabet did not disappoint. A notable 100 updates were announced, with new AI features coming across the board.

Alphabet is already finding ways to make money from AI. “For AI Overviews, overall, we continue to see monetization at approximately the same rate,” Chief Business Officer Philipp Schindler said on the Q1 2025 earnings call when comparing Overviews to traditional search.

And when it comes to advertising customers, AI is helping them create more effective marketing campaigns that can increase return on spend and enhance targeting capabilities.

In Q1, Alphabet generated $34.5 billion in net income. This puts it in an enviable position to keep plowing sizable financial resources into AI initiatives to bolster its competitive standing.

Alphabet’s economic moat

Alphabet’s wide economic moat is a key factor that highlights just how outstanding of a business this really is. The company benefits from powerful network effects within Search and YouTube. There are invaluable, intangible assets at play, like the Alphabet and Google brands, unrivaled technological know-how, and the ability to collect unbelievable amounts of data that can directly impact strategic decisions.

There is also a cost advantage, particularly with Google Cloud. The platform requires huge fixed costs to build out the infrastructure. This explains why the segment was unprofitable for a long time. However, now that revenue has scaled up to $49 billion on an annualized run-rate in Q1, Google Cloud is boosting the bottom line. Operating income totaled $2.2 billion in the first three months of 2025.

Google Cloud’s customers also deal with high switching costs. Once they onboard and start to depend on Alphabet as its mission-critical IT partner, it makes sense why they would be inclined to stay put unless they want to cause potential operational disruptions.

Trading at a discount to the market

Investors will notice that Alphabet’s valuation is too hard to ignore. Shares trade at a price-to-earnings (P/E) ratio of 19.2. This is a discount to the S&P 500 Index, which just doesn’t seem warranted given the quality of this business. And of all the “Magnificent Seven” stocks, Alphabet is the cheapest.

Finding such a great deal in the stock market can make investors think that they’re overlooking something. However, it’s best not to overanalyze the situation. Alphabet is a smart buy while on the dip.

On the back of encouraging pronouncements about its ever-deepening involvement with artificial intelligence (AI), Alphabet‘s (GOOG 1.16%) (GOOGL 1.32%) two listed stocks both gained ground on Friday. The pair each rose in excess of 1% following CEO Sundar Pichai’s remarks on where the company stands with AI.

Those modest price bumps were sufficient to beat the S&P 500 index, which advanced by 0.7% on the day.

Aiming for wider AI deployment

Pichai was a guest on All-In, a popular podcast in which business, technology, and political leaders are interviewed at length. Co-host David Friedberg asked the Alphabet leader whether his company was getting disrupted by aggressive peers that are competing in the AI space.

Image source: Getty Images.

“The dilemma only exists if you treat it as a dilemma,” he answered, shrugging off concerns that Alphabet might be losing ground. Many companies in various segments of the tech industry have not only developed AI functionalities, they have deployed them to enhance their offerings. Among the many examples is Microsoft, which is heavily invested in high-profile AI developer OpenAI.

That question could have been inspired by news from another rival, Apple. Last week that company’s senior vice president of services, Eddie Cue, said it is pushing for more AI-driven search functionality in its native Safari browser.

Pichai pointed out that Alphabet’s Gemini AI platform is embedded in the company’s Google search engine, producing results in an AI Overviews box. It’s going further with plans for an “AI mode” that will provide users with a fuller and more interactive experience with the technology.

A highly visible proponent of the tech

Alphabet’s AI isn’t perfect — much like its traditional search results — but based on personal experience, I’d say its results are useful most of the time. This indicates to me that the company is indeed dedicated to advancing AI, and as the perennial search king, this should keep it an effective and highly visible user of the technology. Investors were right to be cheered by Pichai’s remarks, in my opinion.

While investors have questioned the impact of artificial intelligence (AI) on Alphabet‘s (GOOGL -1.44%) (GOOG -1.44%) business, the company is quietly becoming an AI leader. This is evident from two recent AI announcements.

Firebase Studio and Agent2Agent Protocol

Alphabet recently introduced two important AI solutions: Firebase Studio and Agent2Agent Protocol (A2A).

Firebase Studio is a cloud-based agentic AI development environment that helps build and deploy custom production-quality apps. It combines Gemini AI agents and Google coding kits, and can help both developers and nondevelopers build apps from within their browsers in just minutes. The platform also supports a variety of programming languages and frameworks.

The platform includes more than 60 prebuilt templates, and people are also able to use a prototype agent to help design an app. This all can be done through natural language, as well as by importing images and mockups into the platform. Alphabet’s Gemini AI model, meanwhile, can help users write code and fix bugs, while its Vertex AI platform allows developers to integrate generative AI into their apps. Firebase Studio can also help improve existing apps, which can be imported from repositories such as GitHub or GitLab.

Although the platform is still in its preview phase, initial user reactions have reportedly been strong. It remains free to use during the preview stage, but apps built on the platform must be run on Firebase and Google Cloud services. Consequently, the company will generate revenue from back-end services and hosting fees. Firebase Studio also offers premium tiers, and Alphabet will aim to upsell users who need additional storage and features.

Furthermore, Firebase is closely integrated with Alphabet’s mobile advertising platform, AdMob. Therefore, as developers seek to monetize their apps, Alphabet will also generate revenue through this channel.

Perhaps an even bigger announcement from Alphabet is its new Agent2Agent Protocol (A2A), which has been launched with over 50 technology partners. Many companies have begun to develop AI agents, but they’re often built on different frameworks. A2A will enable agents from different vendors to communicate with one another. It will also support various modalities, including audio and video streaming. Alphabet stated that A2A will usher in a “new era of agent interoperability.”

Alphabet should have a variety of ways to monetize A2A. It could charge listing or integration fees, while also offering premium support packages with security features. This could be important in the healthcare and financial service fields, where sensitive data is shared and there are compliance requirements.

Image source: Getty Images.

Driving Google Cloud growth

However, the biggest benefit that Firebase Studio and A2A will have for the company is driving Google Cloud use. Google Cloud has been Alphabet’s fastest-growing business, with revenue climbing 30% last quarter and segment operating income soaring 142%. These new solutions are just another way to help drive Google Cloud usage and services.

Cloud computing is increasingly becoming one of the most important aspects of Alphabet’s business. The company will invest $75 billion in AI infrastructure this year as it continues to grow its operations to meet rising demand from customers seeking to develop their own AI models and applications on its platform.

In addition to creating its own foundational AI model, Gemini, and providing various services, Alphabet has also produced its own custom AI chips. It recently launched its seventh-generation AI chip, Ironwood, which is the first specifically designed for AI inference. Custom chips can lower costs and enhance performance while consuming less power, making them more cost-efficient for customers as well. This positions Alphabet advantageously in the market.

The company’s pending $32 billion acquisition of data center cybersecurity company Wiz is another example of the emphasis Alphabet is placing on Google Cloud. Wiz’s world-class cybersecurity solutions are another way Alphabet hopes to differentiate its cloud computing offering from competitors. It will also be able to sell Wiz’s products to its large base of Google Cloud customers.

The growing importance of Google Cloud should not be overlooked. it will continue to be a big growth driver for Alphabet in the years ahead, as will Firebase Studio and Agent2Agent Protocol. It’s also one of the biggest reasons to buy Alphabet stock in the market downturn.

Tech giants Alphabet (GOOG -1.04%) (GOOGL -1.18%) and Nvidia (NVDA -3.33%) are among the businesses at the forefront of artificial intelligence (AI), making them compelling AI investments. Each offers a different aspect of the AI ecosystem to invest in.

Nvidia is a leader in the semiconductor hardware AI needs to operate on cloud computing infrastructure, such as Alphabet’s Google Cloud platform. Alphabet’s software products deliver AI’s benefits to consumers. For example, its Google search engine shows AI-generated responses to many search queries.

Given that Alphabet and Nvidia operate in different areas of the AI sector, is one a better AI investment over the other? Getting to an answer requires digging into each tech titan in more depth.

Diving into Alphabet’s AI ambitions

Like many of its tech peers, Alphabet is investing heavily into AI. It poured $52.5 billion into capital expenditures (capex) last year, and expects to up that to $75 billion in 2025.

These costs are a necessity. Alphabet’s AI must win over consumers because people are starting to shift away from search engines, such as Google, in favor of AI tools. Research firm Gartner predicts search engine usage will drop by a whopping 25% in 2026 as people adopt AI apps instead, such as OpenAI’s ChatGPT.

Google accounted for a massive $198.1 billion of Alphabet’s $350 billion in 2025 revenue. So Alphabet needs AI users to embrace its artificial intelligence solutions to keep Google revenue from falling.

So far, Alphabet’s AI products are succeeding. Its Google Cloud customers are using the platform to build AI for their businesses, and usage has surged eightfold over the past 18 months. This contributed to Google Cloud revenue rising to $43.2 billion in 2024, up from 2023’s $33.1 billion.

Alphabet is also working on quantum computers, tech that could supercharge AI. In December, the conglomerate announced Willow, a quantum chip capable of completing calculations in minutes that would take today’s supercomputers centuries to complete. Willow is still experimental, but if Alphabet can bring the chip into broad use eventually, this could be a game changer.

Nvidia and the age of AI reasoning

Nvidia’s outsize success amid the AI boom understandably captured headlines. The firm enjoyed jaw-dropping 114% sales growth to $130.5 billion in its 2025 fiscal year, ended Jan. 26. That success was driven by tech companies, such as Alphabet, buying Nvidia products to build AI capabilities in their cloud data centers.

Nvidia is likely to enjoy further sales growth in 2025 given the expanded capex spending from Alphabet and others. In fact, Nvidia expects $43 billion in first-quarter sales for its 2026 fiscal year, up from the prior year’s $26 billion.

But how long will the company’s soaring sales continue? It could be years as the AI industry evolves. In the last couple of years, businesses focused on building and training powerful AI software. With these systems up and running, the next AI phase is ramping up.

This next period is referred to as the “age of AI reasoning.” It focuses on post-training refinement of AI models to not only process data and information, but to more closely mimic human thinking, like drawing conclusions from the data.

Businesses will need more computing power to deliver this capability, and Nvidia is providing it with its new Blackwell Ultra platform, announced in March. Alphabet is already among the tech luminaries adopting Blackwell Ultra, which is expected to come out in the second half of this year.

And like Alphabet, Nvidia is also looking ahead to quantum computers. It launched a quantum computing research center to help build a quantum machine capable of widespread use.

Choosing between Alphabet and Nvidia

Alphabet’s and Nvidia’s AI capabilities make deciding which to invest in a difficult choice. Adding to the challenge is that both possess stellar financials.

Alphabet’s 2024 revenue of $350 billion was a 14% year-over-year increase, resulting in net income of $100.1 billion and free cash flow (FCF) of $24.8 billion. Nvidia’s 114% year-over-year jump up to $130.5 billion in fiscal 2025 sales led to $72.9 billion in net income and $60.7 billion in FCF.

One factor to help with the decision is to consider stock valuation using the price-to-earnings (P/E) ratio. This commonly employed metric tells you how much investors are willing to pay for a dollar’s worth of earnings.

Data by YCharts.

Nvidia’s stock is currently more reasonably valued after its share price fell amid recent stock market volatility. However, as of the time of this writing, its P/E multiple of 37.8 remains higher than Alphabet’s 19.5, suggesting Alphabet is a better value.

That said, Nvidia’s stock arguably warrants a greater valuation due to factors such as the company’s larger FCF, and the risk to Alphabet’s Google search business amid rising consumer AI usage. Indeed, it may be wise to see how Google’s income changes throughout 2025 before deciding to invest in Alphabet.

Meanwhile, Nvidia makes an attractive investment because of its leadership in AI semiconductor components and strong growth prospects as the AI industry evolves. And with a better valuation, now appears to be a good time to pick up shares. These factors make Nvidia the superior AI stock to invest in right now.

While Microsoft has backed off some leases recently with its data center buildout, both Amazon (AMZN 2.01%) and Alphabet (GOOGL 2.79%) (GOOG 2.56%) look prepared to go full steam ahead.

Microsoft still plans to spend around $80 billion on infrastructure capital expenditures (capex) for artificial intelligence (AI) this fiscal year, but its fiscal year ends in June, only a couple of months from now. However, it’s pausing some early-stage projects, apparently because its needs and those of its AI partner OpenAI are moving in different directions. For its part, OpenAI is looking to build out its own capacity; it’s part of Project Stargate, which plans to spend $500 billion on AI data centers over the next few years.

However, Amazon and Alphabet both plan to spend big in 2025. Alphabet recently reiterated that it would spend $75 billion in data center capex this year, while Alphabet plans to spend around $100 billion. The potential impact of tariffs is not changing their plans.

In a letter to shareholders this month, Amazon CEO Andy Jassy called AI “a once-in-a-lifetime reinvention of everything we know,” and said that that it’s “moving faster than almost anything technology has ever seen.”

Meanwhile, at the recent Google Cloud Next ’25 conference in Las Vegas, Alphabet CEO Sundar Pichai said “the opportunity with AI is as big as it gets.”

Data center spending

History suggests that Amazon and Alphabet’s expenditures will pay off. Amazon has a long history of spending big on capex to build its business. It built an entire warehousing and logistics network from scratch in order to speed up delivery of the goods it sold. This was pricey, but helped turn the company into the e-commerce behemoth it is today.

It then turned around and did the same thing with cloud computing, basically inventing the infrastructure-as-a-service industry with Amazon Web Services (AWS), which is now its most profitable business. Many analysts initially questioned the company’s spending plans for building out AWS and doubted it would become a profitable business.

Alphabet also built out its Google Cloud business spending with a lot in up-front costs, and endured initial losses. However, the fruits of this labor began to shine through last quarter when the Google Cloud segment hit a profitability inflection point, with operating income soaring 142% to $2.1 billion.

Back in 2017, analysts at Goldman Sachs recognized a “historical relationship between accelerated investment periods and revenue reacceleration” at Amazon. They also noted that Amazon’s stock outperformed following these cycles of intensive investment.

Image source: Getty Images.

In its letter to shareholders, Amazon noted that data center investments have attractive free cash flow (FCF) and return on invested capital (ROIC) profiles, and that these assets have useful lives of 15 to 20 years or more. It also predicted that AI infrastructure pricing will come down, especially as more chip options become available outside of Nvidia. Amazon also expects inference to become the biggest driver of AI costs in the future, compared to model training today.

With inference projected to become increasingly important, both Amazon and Alphabet have developed their own custom AI chips designed specifically for inference. Amazon said its new Trainium2 chip has a 30% to 40% better price-to-performance ratio than current graphic processing units (GPUs). One of its biggest goals is making inference less expensive for customers, which it believes will ultimately lead to more overall AI spending.

Meanwhile, Alphabet just introduced its seventh-generation AI chip, Ironwood. It said the new chip has been designed for the “age of inference,” with increased computation power and memory capacity. This is Alphabet’s first chip designed specifically for inference, and was created to handle models that “provide the proactive generation of insights and interpretation.” It’s also its most energy-efficient chip to date.

Time to buy the stocks

Amazon and Alphabet are investing heavily in AI, and over the long run these investments should pay off, especially with Microsoft potentially slowing its spending. Demand for cloud computing and AI services is driving strong growth, as these companies help customers create their own AI models and apps and run AI workloads on their platforms.

Both companies have also been at the forefront of developing custom AI chips to help lower AI infrastructure costs. As AI moves more toward inference, both companies are lowering the overall cost by developing chips that consume less power and are designed specifically to handle these tasks.

AI is also permeating the rest of their businesses. Amazon has been using AI to become more efficient in its logistics and warehouse operations, and to make better product recommendations to its customers. Alphabet has made great strides with its newest Gemini 2.5 model, quickly catching up in the AI race; this should help its search and ad businesses, as should some groundbreaking AI tools, such as its Veo 2 text-to-video generator.

With the recent market sell-off, both stocks are trading at attractive valuations. If history is any indication, both will be long-term AI winners, making them both solid long-term investments.

The U.S. economy has produced the world’s most valuable companies for more than a century. United States Steel became the first $1 billion company in 1901, and 117 years later in 2018, Apple became the first enterprise to achieve a valuation of $1 trillion.

Apple remains the world’s largest company with a market capitalization of $3.3 trillion. But since 2018, several other American organizations have joined it in the trillion-dollar club, including Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Berkshire Hathaway. Tesla and Broadcom were also members until they recently suffered sharp declines in their stock prices.

I think one more company has the potential to cross the $1 trillion milestone in the coming years. Oracle (ORCL 1.09%) operates some of the best data center infrastructure for artificial intelligence (AI) development, and management’s guidance suggests this part of its business could grow tenfold over the long term.

Oracle is valued at $403 billion as of this writing, so investors who buy the stock today could earn a whopping 148% gain if it does join the $1 trillion club.

Image source: Getty Images.

Demand for AI data centers is through the roof

There are two key phases involved in developing an AI model: The training phase is when a developer feeds the model mountains of data for it to learn from, and the inference phase is when the model accepts inputs from users and generates responses (like when you interact with a chatbot). Both require a substantial amount of computing power, and most developers source it from companies like Oracle.

Oracle operates some of the best AI data centers in the world. They are fitted with state-of-the-art graphics processing units (GPUs) from leading suppliers like Nvidia and Advanced Micro Devices, which are chips specifically designed to handle AI workloads. In fact, Oracle is currently building a cluster of 64,000 Nvidia Blackwell GB200 GPUs — not only is that the most powerful chip in the industry right now, but this will also be one of the largest clusters on offer by any data center operator.

When developers have access to more chips, they can process more data, more quickly, and thus deploy much “smarter” AI models. But scale isn’t Oracle’s only advantage, because its proprietary random direct memory access (RDMA) networking technology allows data to move from one point to another much faster than traditional Ethernet networks. Since developers typically pay for computing capacity by the minute, this can result in significant cost savings.

Oracle opened its 101st data center cloud region during its fiscal 2025 third quarter (ended on Feb. 28), but demand continued to significantly outstrip supply. In fact, chairman Larry Ellison said GPU usage for AI training purposes alone has soared by a staggering 244% over the last 12 months, and the company is also seeing “enormous” demand for inference workloads.

Nvidia CEO Jensen Huang thinks next-generation AI reasoning models, which spend more time “thinking” before rendering responses, will consume 100 times more computing power than their predecessors. As a result, demand for data center capacity for inference workloads is only just heating up, so it’s no surprise Oracle wants to grow its footprint to between 1,000 and 2,000 cloud regions over the long term.

In other words, Oracle could eventually have over 10 times more data centers in operation than it does today.

Oracle Cloud Infrastructure revenue is soaring

Oracle generated $14.1 billion in total revenue during the fiscal 2025 third quarter, but the Oracle Cloud Infrastructure (OCI) segment (which is where the company accounts for its AI data centers) represented just $2.7 billion of that figure.

However, while Oracle’s total revenue increased by just 6% year over year, OCI revenue soared by 49%, making it the fastest-growing part of the entire organization by a wide margin. The OCI business would be growing even faster if it had enough data centers to meet demand, which is why the company expects revenue growth to significantly accelerate as more capacity comes online.

Oracle CEO Safra Catz expects OCI revenue to increase by more than 50% for the fiscal 2025 full year (ending May 31), with an even faster growth rate in the cards for fiscal 2026.

To put a fine point on Oracle’s future potential, the company’s remaining performance obligations (RPOs) soared by 63% to a record high of $130 billion (across all business segments) during the third quarter. RPOs are like an order backlog that is expected to convert into revenue in the future, and Larry Ellison said demand for capacity for AI training and inference workloads were big drivers of the Q3 surge.

Oracle’s path to the $1 trillion club

Oracle generated $4.26 in earnings per share (EPS) over the last four quarters, which places its stock at a price-to-earnings (P/E) ratio of 33.8. That is roughly on par with the valuations of other AI cloud companies like Microsoft and Amazon, so the stock isn’t necessarily cheap, nor is it expensive:

PE Ratio data by YCharts

However, Wall Street’s consensus estimate (provided by Yahoo!) suggests Oracle could deliver $6.78 in EPS during fiscal 2026 (which begins in June 2025). That places its stock at a forward P/E ratio of just 21.1, implying it would have to rise by 59% over the next year or so just to maintain its current P/E ratio of 33.8.

If that scenario plays out, it would lift Oracle’s valuation to $640 billion. From there, the company could reach the $1 trillion club within five years if it grows its EPS by just 9.3% annually. I think that is very achievable for two reasons: First, the company’s estimated EPS for fiscal 2026 represents growth of 13%, and second, management is forecasting accelerating revenue growth, led by the OCI business.

Oracle’s data centers rely heavily on automation, which reduces labor and other operating costs. As a result, the company anticipates rising profit margins as the OCI business continues to scale up, which will boost its EPS overall. Remember, Oracle plans to grow its data center footprint more than tenfold from here, which could drive explosive earnings growth over the long term.

Therefore, I think Oracle has a clear path to joining the $1 trillion club in the coming years, and its stock could be a great addition to any diversified portfolio.

The headline of this article says it all: Alphabet (GOOG -2.71%) (GOOGL -2.65%) stock is cheaper than the S&P 500 (^GSPC -1.71%) index. It might seem a bit odd that a dominant tech company would fall behind the valuation of a broad market index, but that is exactly what happened.

This provides investors a rare opportunity to scoop up a best-in-class business for cheap and quells fears of potentially buying a significantly overvalued stock. I think it’s time to load up on shares (if you haven’t already), as Alphabet’s stock is primed to deliver market-beating returns.

Alphabet has multiple strong business units

Alphabet’s primary business is one of the most dominant in the world: Google. Many people surf the internet using the Google search engine, and Alphabet has built an incredible advertising business on top of that. In Q4, Google search generated more than $48 billion in revenue. Although its growth wasn’t super-fast by any means, it still rose 12.5% year over year, a strong pace for a mature business unit.

Alphabet gets its growth from other divisions, namely Google Cloud, its cloud computing segment that has seen strong growth thanks to the artificial intelligence (AI) arms race. Cloud computing is primed to benefit from the general build-out of AI because it provides computing muscle to its users that would otherwise be too expensive to buy.

Most companies can’t justify spending tens of millions of dollars on a powerful computing server dedicated to AI development. Instead, they can rent that computing power from a cloud computing provider like Google Cloud and use it whenever they need to. This allows them to scale usage up or down easily.

This is a profitable business for Alphabet because Google Cloud can charge a premium for using the computing power bandwidth versus buying the equipment outright. In Q4, Google Cloud’s revenue rose 30% to $12 billion, which is still about a quarter of the size of the Google search engine. Still, this is solid progress, and it’s an area that will continue to grow as the AI arms race continues.

With Alphabet’s revenue growing companywide 13% year over year, it’s clear that it has the ability to beat the market based on growth alone. However, it also improved its operating margin (rising five percentage points from 27% to 32% year over year) and repurchased $15.6 billion shares in the quarter, which caused its earnings per share (EPS) to rise by an impressive 31% year over year.

That doesn’t sound like a stock that should be valued at a discount to the market; it should have a premium. However, that’s not the case. But if you can find these deals in the market, buying them is a smart idea, as the market will eventually correct itself.

Alphabet’s stock is priced to buy now

Right now, Alphabet’s stock trades for 23 times trailing earnings and 20.6 times forward earnings estimates.

GOOGL PE Ratio data by YCharts

For comparison, the S&P 500 trades for 25.7 times trailing earnings and 22.5 times forward earnings estimates, so Alphabet’s stock is discounted to the market in both of these important metrics.

Alphabet’s optimism-producing growth is expected to continue, as Wall Street analysts project 11% revenue growth in 2025 and 2026, alongside EPS growth of 12% and 14%, respectively. Considering the stock market’s long-term average growth rate is 10% annually — some years it’s more; some years it’s less, even a big loss — and that stock returns are highly correlated to EPS growth over the long term, Alphabet looks like a stock that can grow faster than the market for some time.

As a result, it makes for a great purchase today for investors of all types, as it can be considered both a value play (cheaper than the market), as well as a growth story (Google Cloud and AI).