Alphabet brought in $132 billion in net income last year.
Google Cloud was unprofitable for more than a decade before becoming a critical piece of Alphabet's growth story, which is a useful playbook as the company seeks to maximize Gemini and Waymo.
Online advertising and cloud revenue are still growing, which means Alphabet can strengthen its cash position even more in upcoming quarters.
Artificial intelligence (AI) stocks can be a second chance for people who wished they had invested in internet stocks back when the technology was new. Although AI has been around for a few years and has successfully reached the mainstream, its real-world applications are still in their early stages.
And while it's possible to make a lot of money with small-cap stocks that offer exposure to AI, those same stocks often come with significant risks. I'd rather invest in no-brainer AI stocks that do not require as much analysis and are a lot safer than trying to find the next hidden gem.
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Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) fits the bill. It's a compelling AI stock despite being one of the largest companies in the world. Here's why investing $5,000 in Alphabet stock can be beneficial for long-term investors.
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Alphabet operates in a position of financial strength, which minimizes the likelihood of dramatic price swings. Alphabet generated $132.2 billion in net income last year, and that's after its AI investments. It's also sitting on nearly $127 billionn in cash, cash equivalents, and marketable securities.
That type of capital and Alphabet's ability to generate substantial profits right now make it easier for it to invest in new opportunities.
Alphabet is delivering growth in the present while setting itself up for long-term AI tailwinds. The company's ad network and cloud platform serve as the major revenue engines, contributing to 15% sales growth in 2025.
Google Cloud has been especially successful in recent years. It's the backbone for many websites and AI apps. For instance, OpenAI uses Google Cloud for ChatGPT, showing that Alphabet acts as the digital foundation for many AI leaders.
Revenue for Google Cloud grew by 48% year over year in Q4, and that growth yielded $5.3 billion in operating income in the quarter, more than doubling year over year. Google Cloud represented roughly 15% of Alphabet's Q4 2025 revenue. As this segment of the tech conglomerate continues to grow, it can translate into accelerated revenue growth for the company as a whole.
Although Alphabet makes most of its revenue from online ads and cloud computing, the company is still investing in AI ventures to further diversify its income. Alphabet's AI model, Gemini, already has more than 750 million monthly active users.
Gemini integrates with Google search to enhance the user experience, but those monthly active users are specifically people who have downloaded the Gemini App. It does not include the AI Overviews in Google Search, which have more than 2 billion users monthly.
Waymo is another critical segment that showcases Alphabet's entry into physical AI. Waymo creates self-driving vehicles that are already being used in multiple U.S. cities. The company can challenge Uber and gain market share in the ride-hailing industry in the future.
Alphabet has the cash, resources, and corporate culture to play the long game with these ventures. Google Cloud was unprofitable for more than a decade before it became a vital piece of the company's long-term revenue and earnings projections. Few companies can wait that long before generating profits. Alphabet did it with Google Cloud, and that has put it in an incredible position to repeat the process with other ventures.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Uber Technologies. The Motley Fool has a disclosure policy.