The stock of Alphabet currently represents an attractive prospect to investors seeking to find both growth and value. Concerns that the company might slip below 90% in the search market share have been cast aside, as it holds an overwhelming 87% market share. That would be a dream come true for most businesses. Google Search has been the primary entry point to the Internet for billions of users, and the company continues to hold onto this segment.
Investors have been primarily worried about the emergence of generative AI and its potential to disrupt Google at the fundamental level. These fears have not been reflected in Alphabet’s financial performance despite some users considering alternatives. Google Search revenue increased by almost 10% (year over year) by the end of the first quarter of 2025 to 50.7 billion. Altogether, the overall revenue of Alphabet increased by 12% to more than 90 billion, whereas the profit surged by 46%. These figures indicate that users and advertisers continue to utilise Google despite the introduction of new technologies.
Alphabet has not been left behind by change. The company has introduced AI-enabled features such as AI Overviews, which are currently preferred by more than 1.5 billion users every month. The innovations are keeping the users focused and allowing Google to remain ahead. Alphabet also focuses heavily on investing in cloud computing and AI infrastructure, a market that is growing rapidly in new directions and laying the groundwork for future growth.
The valuation of Alphabet is another aspect that makes the latter more attractive these days. The company has a stock price of nearly 19 times trailing earnings, the highest in over 10 years. This is significantly lower than the average multiple of the S&P 500; therefore, Alphabet is a bargain compared to its competitors. The market is overselling its worries about AI, not the strength of Alphabet.
In the future, Alphabet’s ability to dominate in search, its expansion into AI, and its strong financial performance indicate that the company may have a bright future.
