Key Points
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock has climbed in the triple digits over the past three years as the company benefited from two things — the strength of its long-established businesses and an extra boost from the artificial intelligence (AI) boom. Even people who don’t recognize the name “Alphabet” may actually be big users of the company’s flagship product, Google Search.
The search engine is the world’s most popular, with more than 90% market share. And the advertising across the Google platform makes it the company’s biggest revenue driver. On top of this, Alphabet also generates significant revenue from its Google Cloud business, and AI has helped this unit’s growth truly take off in recent quarters.
Considering these points, should you buy Alphabet before a potential catalyst on July 22? Let’s find out.
Alphabet’s biggest revenue source
Before we talk about this upcoming event, though, let’s catch up on the Alphabet story so far. As mentioned, advertising represents the company’s biggest revenue source. For example, in the latest quarter, Google advertising, at more than $77 billion, accounted for 70% of total revenue. And this ad revenue climbed 15% from the year-earlier period.
Advertisers rush to the Google platform because they know they will easily find us, their target audience, there. And now, thanks to Alphabet’s work in AI, Google Search is getting better, which is driving increased usage, and that should prompt advertisers to keep coming back and even spend more. This use of AI in search pushed queries to a record level in the recent quarter.
Alphabet has developed its own large language model, Gemini — it’s the AI driving Google Search, it serves as an AI assistant to Google users, and Gemini also serves Google Cloud customers.
Gemini has recently made significant progress in market share. While OpenAI’s ChatGPT still is the world’s No. 1 AI assistant, its market share fell below 50% recently for the first time, TechCrunch reported, citing Sensor Tower’s State of AI Report for 2026. Gemini is the second most-used AI assistant after ChatGPT — they hold 27.7% and 46.4% market share, respectively.
Backlog almost doubles
Meanwhile, Alphabet’s cloud business has experienced enormous growth. In the first quarter, revenue soared more than 60% to $20 billion, and backlog almost doubled from the previous quarter to more than $400 billion. Though Google Cloud has seen revenue climb in recent years, the AI wave has offered the business an extra lift — and considering the general sustained demand that Alphabet and others in the space are seeing, this is likely to continue. In the quarter, Alphabet said the biggest driver of cloud revenue was AI solutions.
Now, let’s consider what is on the agenda for July 22. Alphabet is scheduled to report second-quarter earnings after the closing bell. The message we’ve heard from others in the AI space in the previous quarter and in recent days offers us reason to be optimistic about the company’s report. For example, ASML, a chip equipment maker, this week increased its annual sales forecast for a second time this year amid high AI chip demand.
A look at valuation
It’s also important to note that, while Alphabet isn’t the cheapest of its fellow tech stocks, it still trades at a very reasonable level — at 25x forward earnings estimates. This offers investors a solid entry point, and this level may also prompt investors to get in on the stock, particularly after a strong earnings report.
Meanwhile, Alphabet is a great choice for both cautious and aggressive investors as it offers something to please both of these groups. Alphabet built a strong business prior to the AI boom, excelling in search and cloud computing, so its successes aren’t tied to the future of AI. But AI offers the company an extra growth opportunity over time.
All of this makes Alphabet a buy — but you don’t have to rush to get in on the stock prior to the earnings report. This is because short-term shifts in stock price won’t have much of an impact on your returns if you hold on for the long term — and long-term investing is the best way to go. This means you can take your time and buy Alphabet shares before or after July 22 — and potentially set yourself up for a long-term win.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and Alphabet. The Motley Fool has a disclosure policy.
