This Magnificent Artificial Intelligence (AI) Stock Is Now in the $2 Trillion Club

Core Viewpoint - The strong quarterly report from Alphabet supports bullish sentiment, with shares up 59% over the past year, and the company now valued at over $2 trillion [1]. Financial Performance - Alphabet's Q1 revenue reached $80.5 billion, a 15% year-over-year increase, while earnings per share rose 62% to $1.89, exceeding market expectations [2]. - All segments performed well, with ad revenue increasing by 13%, driven by strong performance in Search and YouTube [2]. AI and Cloud Division - Alphabet's Google Cloud division is a key player in the AI space, offering various AI features and posting a Q1 revenue increase of 28%, with operating income of $900 million [3]. - The company is well-positioned to leverage AI advancements due to its substantial financial resources, including $95 billion in net cash and a consistent free cash flow [5]. Attractive Qualities - Alphabet benefits from long-term tailwinds, including the rise of smartphones and increased internet usage, enhancing its ability to monetize through ads [4]. - The company's diverse product offerings are used by hundreds of millions, providing a platform to deploy AI capabilities effectively [5]. Valuation and Shareholder Returns - Despite recent gains, Alphabet's stock remains attractively valued with a forward price-to-earnings ratio of 22.2 [6]. - The company announced a $70 billion share-repurchase program and will pay a quarterly dividend of $0.20 to shareholders [7].