"Alphabet was supposed to be at risk when chatbots started answering questions directly, but the company turned that threat into an advantage. It folded its Gemini models right into search, rolling out AI Overviews and AI Mode so users could move back and forth between traditional search and AI chat with a click. That change has driven more queries, which is feeding into Alphabet's advertising platform, driving growth."
"The company has always been good at using its own ecosystem to stay ahead. It became the default search engine for billions of people by controlling Android and the Chrome browser and cutting a revenue-sharing deal with Apple to lock in prime placement on iPhones. Now it's building a similar moat in AI. While its cloud computing business, Google Cloud, is only No. 3 in market share, it has arguably the most complete AI stack."
"In addition to its leading Gemini model, it also has custom AI chips, called tensor processing units (TPUs), that help lower costs, strong data analytics tools, and Vertex AI for helping customers build and deploy their own AI models and applications. On top of that, it Waymo's robotaxi business keeps expanding into more cities, and its work in quantum computing is starting to show real progress."
Growth stocks have been leading the market higher, and artificial intelligence appears to remain in the early innings with long-term upside potential. Alphabet integrated its Gemini models into search via AI Overviews and AI Mode, increasing queries and monetizable ad inventory. Alphabet leverages Android, Chrome, and a revenue-sharing deal with Apple to maintain search dominance and build an AI moat. Google Cloud, though third by market share, offers a broad AI stack including Gemini, custom TPUs, data analytics tools, and Vertex AI. Alphabet also advances Waymo's robotaxi rollout and shows early progress in quantum computing, positioning for sustained AI leadership.
Read at The Motley Fool
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