Could This Underrated AI Stock Be the Best Growth Story of 2026 and the Next Decade?

While Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has been the best performer among the so-called "Magnificent Seven" stocks this year, it still may be one of the most underrated artificial intelligence (AI) stocks around and has one of the best growth stories both next year and over the long term.

Let's look at why Alphabet is a stock you'll want to invest in.

Controlling the entire tech stack

When OpenAI introduced AI chatbots to the masses, Alphabet's Google search engine faced its first real competition in decades. However, it likely is one of the best things that could have happened to the company. First, the competition from AI was one of the biggest reasons the company was allowed to keep its Chrome browser and Android smartphone operating system, each of which holds an over-70% market share, despite losing a government antitrust case.

Not only that, but the judge also let it keep its exclusive search revenue-sharing deal with Apple. If not for the looming threat of AI, this may not have played out this way.

However, the ruling ultimately kept intact Alphabet's huge distribution advantage. Through Chrome, Android, and its revenue-sharing deal with Apple, Google Search is the default gateway to the internet for people around the world. It also gives the company multiple surfaces to incorporate its own Gemini AI model into. This is a big edge over chatbot apps, as it's meeting people where they already are and is creating a frictionless AI experience. That's easier than having people download and use a stand-alone app.

At the same time, competition from OpenAI and others also brought the best out of the company and shone a light on some of its behind-the-scenes innovations. Alphabet has long been working on AI, but there was no real need to push it forward given its dominant search position. However, the introduction of ChatGPT helped supercharge its efforts and led it to create one of the best large language models (LLMs) available: Gemini. As it incorporates Gemini throughout its products, this is now helping drive query and revenue growth.

The emergence of AI also threw a spotlight on Alphabet's decades-long development of its Tensor Processing Units (TPUs). Alphabet has long been using these custom chips to run its internal workloads, but as the need for computing power exploded to run AI workloads, Alphabet suddenly found itself in an enviable position.

Its chips could train LLMs and run AI inference at a much cheaper cost than Nvidia's graphics processing units (GPUs), giving it a big structural cost advantage. This has created a huge flywheel for the company, where it can more cheaply train its model, giving it the resources to make both Gemini and its chips better, leading to more success and the cash to put back into its LLM and chip efforts.

Alphabet's TPUs have become so good that they are now a competitive alternative to Nvidia's GPUs. For example, Anthropic has placed orders to use TPUs to begin to power some of its AI workloads. Morgan Stanley projects that Alphabet will get roughly $13 billion in annual revenue for every 500,000 TPUs that customers deploy. Its analysts estimate that Alphabet will rent out 5 million TPUs in 2027 and 7 million in 2028.

Image source: Getty Images

Beyond TPUs and Gemini

Alphabet's chip advantage isn't just in hardware. The TPUs are specifically designed to handle tasks optimized for its TensorFlow framework and, more recently, other frameworks, such as JAX and PyTorch, used to train neural networks. It's also integrated with Alphabet's software, such as its XLA compilers, which fuse multiple small tasks into a single optimized operation. This allows AI workloads to run more quickly while using significantly less power and memory. Meanwhile, its Vertex AI platform allows customers to easily use its TPUs and XLA compilers.

The company is also looking to extend its vertical integration advantage. It is set to acquire cloud computing cybersecurity company Wiz to add another level to its tech stack. It also just announced that it is purchasing energy infrastructure company Intersect to help it secure access to necessary power for its data center buildout.

Alphabet is the most complete end-to-end AI company on the planet, and the advantages of its vertical integration and its controlling the complete tech stack should just grow over time. That's what makes it the best growth story in AI both for 2026 and over the next decade.

Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, and Nvidia. The Motley Fool has a disclosure policy.