This Growth Stock Continues to Crush the Market

Core Insights - Alphabet's stock has increased by 63% over the past year and has returned over 11,470% since 2004, with a current market cap of $3.5 trillion [1][2] AI Market Position - Alphabet is establishing itself as a leading player in the artificial intelligence (AI) sector, with strong momentum expected to continue into 2026 [2] - The initial concerns regarding ChatGPT's impact on Google's search business have shifted, as Google Search generated $56.5 billion in revenue in Q3, up 14.5% year-over-year [4][5] AI Integration and Growth - Alphabet has rapidly integrated AI features into Google Search and launched its AI chatbot, Gemini, which has reached 650 million monthly active users [5] - OpenAI's recent challenges may provide Alphabet with an opportunity to strengthen its position in the AI market [6][10] Competitive Landscape - OpenAI's ChatGPT holds a 61% market share in the AI app space, but concerns about its financial sustainability have emerged, particularly regarding its $1.4 trillion data center funding plans [7][9] - Alphabet's strong cash flow and balance sheet position it well to invest in AI, contrasting with OpenAI's uncertain funding situation [10] Financial Performance and Valuation - Alphabet's stock trades at just under 27 times 2025 earnings estimates, with analysts projecting annualized earnings growth of 15% to 16% over the next three to five years [12] - The company's earnings are primarily driven by its digital advertising and cloud services, with Google Cloud benefiting from increased AI demand [13]