Key Points
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Google Gemini has more than 900 million users, and Apple is using the chatbot as the underlying model for its new Siri AI.
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Alphabet is highly profitable and had $10 billion in free cash flow in Q1 2026.
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Shares of Alphabet are far cheaper than many other tech stocks right now.
- 10 stocks we like better than Alphabet ›
There are plenty of artificial intelligence (AI) stocks to choose from these days, and many of them have very impressive returns. But if I had $500 to put toward just one AI stock right now, it would have to be Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG).
It might not seem like the obvious choice, considering that some AI stocks, like Micron Technology and Advanced Micro Devices, are up 674% and 280%, respectively, over the past 12 months. Meanwhile, Alphabet has gained about 98%.
Here’s why I’d put my money on Alphabet right now.
Alphabet can benefit from long-term AI opportunities
Unlike AI hardware companies, Alphabet is a software-and-services play, which gives it the potential to continue benefiting even after the initial AI infrastructure boom has cooled. For example, Alphabet’s Google Gemini chatbot already has 900 million users and is firmly integrated into Google’s ecosystem of services and software, including Android, Google Workspace, Search, YouTube, and other services.
This means that for years to come, hundreds of millions of users will use Google Gemini as their AI service, even after the semiconductor boom has faded. What’s more, the company is already benefiting from AI, with sales in its Google Cloud segment (which houses AI revenue) rising 63% to $20 billion in Q1 2026.
Additionally, Apple is reportedly paying Google $1 billion annually for use of Gemini in the new version of its Siri AI. It seems Apple has picked its AI horse to bet on, which could lead to long-term AI sales for Alphabet and give it an edge over other chatbots from OpenAI and Anthropic.
All of the above give Alphabet many opportunities to upsell users to more AI features, potentially generate more AI revenue from the Apple deal, and add more cloud revenue through additional artificial intelligence services.
Alphabet is highly profitable, and its shares are relatively cheap
Another important reason why I’d choose Alphabet as my top AI stock right now is that it is very profitable — earnings jumped 82% year over year to $5.11 per share in Q1 2026 — and the company had more than $10 billion in free cash flow in the quarter.
I can’t ignore that Alphabet is spending a lot of money on AI infrastructure — up to $190 billion this year alone. But its profits and strong free cash flow position mean investors don’t need to be overly concerned about the company’s financial picture. The company’s spending will likely eventually slow down once enough AI infrastructure is in place.
Just as impressive is that, even with Alphabet in a leading position in AI, with plenty of cash and profitability, the company’s shares are reasonably priced right now. Alphabet stock has a price-to-earnings (P/E) ratio of just 27, well below the average P/E ratio of 34.
When you add it all up, I think it’s a pretty solid case for putting $500 (or more) toward Alphabet right now. It might not be the highest-flying stock, but I think it has the potential to go the furthest.
Should you buy stock in Alphabet right now?
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Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, and Micron Technology. The Motley Fool has a disclosure policy.
