This Tech Stock Is Up 69% in 2025. 1 Reason This Could Be Just the Beginning.
Key Points
Alphabet, the parent company of Google, takes a full-stack approach to AI.
The tech giant has its own chips, software framework, research lab, and AI products.
This approach allows Alphabet to keep costs down and avoid reliance on other companies.
- 10 stocks we like better than Alphabet ›
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) has made an impressive turnaround this year. In April, its share price sank as low as $141. It's currently sitting above $300 and is up nearly 69% year to date (as of Dec. 5).
There's understandable trepidation about investing in stocks after this rate of growth. But the parent company of Google remains an excellent investment, and there's one reason in particular it could continue to do well.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Alphabet.
Alphabet's AI stack gives it a significant edge
Artificial intelligence (AI) has been a major growth driver for tech companies, including Alphabet. The key differentiator for Alphabet is its full-stack approach. Other AI companies rely on partnerships, typically with Nvidia for graphics processing units (GPUs) and OpenAI, the developer of ChatGPT, for AI models.
Alphabet, on the other hand, develops its own custom Tensor Processing Units (TPUs) to train AI models. It has its own software framework, research lab, and large language model (LLM), Gemini. Gemini 3, which was released on Nov. 18, has received rave reviews so far and been part of Alphabet's recent success. Because Alphabet can do everything in-house, it isn't reliant on other companies for its AI development.
This vertical integration allows Alphabet to reduce the notoriously high costs involved with AI computing. It's also a revenue driver, as Alphabet can sell its AI products and services to other companies. For a recent example, Bloomberg has reported that Meta Platforms is considering purchasing Alphabet's TPUs for its data centers instead of Nvidia GPUs.
Alphabet stock was a bargain earlier this year. Although it's now trading at a much higher valuation, this is still one of the best tech companies and one that's well-positioned to capitalize on the growth of AI.
Should you invest $1,000 in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $540,587!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,118,210!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 1, 2025
Lyle Daly has positions in Alphabet, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
