This Artificial Intelligence Stock Is a Must-Own for 2026

The arrival of OpenAI's ChatGPT in November 2022 flung open the floodgates to the current global fervor over artificial intelligence (AI). The new technology was so astounding that some predicted OpenAI would spell doom for Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) and its Google search engine business.

In fact, Google was declared an illegal monopoly, but the judge presiding over the case, Amit Mehta, didn't dispense harsh penalties, explaining "The emergence of GenAI changed the course of this case." He saw AI offering consumers new ways to find information online, reducing Google's sway.

Three years after ChatGPT's debut, predictions about Google's decline have failed to materialize. While OpenAI continues to bleed money, Google is proving why it's a must-own stock in the AI era.

Image source: Getty Images.

AI's boost to Google

Google not only remains the search leader, it looks stronger than ever -- thanks to AI. According to Alphabet CEO Sundar Pichai, "AI is driving an expansionary moment for Search. As people learn what they can do with our new AI experiences, they are increasingly coming back to search more."

This can be seen in Google's search engine market share, which remained strong in 2025, ticking up to 90.8% in December from 89.7% the prior year. Competitor Microsoft folded OpenAI's tech into its search engine to challenge Google's dominance. But Microsoft's search market share of 4% remains well below its rival's.

Google's AI capabilities are solidifying its internet dominance, a fact underscored by the precipitous decline in traffic it sends to other websites. This suggests users are getting the AI-generated answers they need directly on Google and then leaving. The behavioral shift left many website publishers reeling, with some seeing site traffic plunge a whopping 40%.

Alphabet's AI advantages

AI has not blunted Alphabet's revenue. In actuality, the opposite is happening. In the third quarter of 2025, Google search sales increased to $56.6 billion from $49.4 billion in 2024, helping the company grow total revenue by 16% year over year to $102.3 billion.

Alphabet is only strengthening its AI position. It develops its own semiconductor chips, reducing reliance on Nvidia's pricey processors, while customizing capabilities to optimize AI performance. Its new Ironwood chip is "purpose-built to power thinking, inferential AI models at scale," according to the company.

The conglomerate also acted to address rising energy demands driven by AI computing. Alphabet has to curb electricity usage during peak times. To mitigate this restriction, it acquired Intersect, an energy business specializing in renewable power.

Alphabet is only getting stronger

Alphabet is an AI powerhouse, and possesses the elements to remain so. Google is building on its established search leadership by becoming an AI portal. The company is moving toward greater energy independence with the Intersect acquisition.

Its Google Cloud business saw sales soar 34% year over year to $15.2 billion as customers adopt its AI offerings. And its Waymo self-driving car company is expanding, as it introduces the AI-powered service to more cities around the world in 2026.

These factors position Alphabet for years of business growth ahead, and make it a must-own stock as the AI industry speeds toward a projected $1.7 trillion market size by 2031.

Robert Izquierdo has positions in Alphabet, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.