Why Alphabet Could Be the Best Magnificent 7 Stock to Own

Alphabet's Business Overview - Alphabet's business remains strong with signs of continued dominance in its core areas [6] - The company's long-term bets in potentially world-altering technologies add significant upside for investors [6] - Alphabet has the lowest forward valuation multiple among the Magnificent Seven stocks, trading below or equal to the broader market valuation [12] Google Search Performance - Google Search is the biggest revenue driver, accounting for around 55% of total revenue last quarter [8] - Google Search revenues have grown by over 10% year-over-year in each of the last five quarters [13] - Despite competition from chatbots like ChatGPT, Google Search remains the dominant internet search engine [25] Other Revenue Streams - Alphabet's other revenue-generating segments include YouTube ads, third-party ad sales, subscriptions, platforms, device revenue, and Google Cloud revenue [14] - Each of these segments contributed between 8% and 13% of total revenue last quarter, with most showing solid growth [14] - YouTube ad revenue benefits from the secular trend away from traditional television [22] - Google Cloud is experiencing accelerating growth [22] Long-Term Projects and Innovations - Waymo and Google Quantum AI are two massive projects with long-term potential [15] - Waymo is a leader in autonomous driving and robotaxi services, with the ride-sharing market projected to nearly quadruple by 2032 [15] - Google's Willow quantum chip represents a breakthrough in quantum computing, though it is a long-term bet with no immediate revenue impact [23] Market Position and Analyst Outlook - Alphabet is considered one of the best Magnificent Seven stocks to own for long-term investment [3] - The company has a "Moderate Buy" rating based on 42 analyst ratings, with a high forecast of $240 and an average forecast of $206.69 [6] - The 12-month stock price forecast suggests a 7.23% upside to $206.69 [27] Competitive Landscape - Google is combating the rise of chatbots by integrating AI capabilities into Google Search through its Gemini model [21] - Google's daily user base is significantly larger than ChatGPT's 300 million weekly users [21] - The potential antitrust breakup of Google Search is a concern, but any real impact is likely delayed by appeals [26]