After a 70% Run in 6 Months, Is Alphabet Still a Top AI Stock to Own?

Core Insights - Alphabet's stock has increased over 70% in the last six months following a strong quarterly performance, indicating that AI is expanding rather than eroding its core business [1][2] - Initial investor concerns about AI's impact have shifted, with recent reports showing AI as a significant growth driver across Alphabet's key segments [2] Financial Performance - Alphabet achieved its first-ever $100 billion quarter, with revenue rising 16% year over year to approximately $102.3 billion and earnings per share increasing 35% to $2.87 [4] - Revenue from Google Search and other segments grew by 15% year over year, while YouTube ad revenue also increased by 15% to just over $10 billion [4] - Google Cloud revenue surged 34% to $15.2 billion, driven by high demand for AI infrastructure and the adoption of Gemini-powered services [5] AI Impact - AI features are enhancing engagement and monetization, with CEO Sundar Pichai noting that AI Overviews are driving meaningful query growth [6][9] - Ads associated with AI Overviews are monetized at rates comparable to traditional ads, indicating a solid foundation for future growth [6] - The usage of AI Mode in online search is increasing weekly in the U.S., and YouTube is benefiting from improved recommendation quality through AI [7] Market Sentiment - The overall sentiment towards Alphabet's valuation has improved, although it remains reasonable when compared to its fundamentals [8]