If I Had $5,000 to Invest in Artificial Intelligence (AI), I'd Put It in This Stock
Key Points
Alphabet controls every part of its AI stack, from hardware to software, which has helped it scale more efficiently.
The tech giant has seen excellent growth in top-line revenue, Google Cloud, and the number of Gemini users.
- 10 stocks we like better than Alphabet ›
If you want to get more AI exposure in your portfolio, there's a wide range of options available. You have the hardware makers, starting with market leader Nvidia. AI infrastructure companies, including Emcor Group, provide the data centers and components needed to train large language models (LLMs). There are also AI software companies and businesses at every layer of the AI stack.
Or, you could invest in a company that does it all with Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), the parent company of Google. While I'm bullish on several AI companies, Alphabet is the one I'd choose if I were putting $5,000 into one stock.
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Image source: Alphabet.
A full-stack AI approach
Alphabet is a rarity in the tech world, as it controls its entire AI stack. It has its own AI data centers and is in the expansion process, with projected capital expenditures of $175 billion to $185 billion in 2026. The company develops Tensor Processing Units (TPUs), custom AI accelerator chips that Google has been using since 2015. It has its own AI model, Gemini, and easy distribution of AI tools through Google's existing businesses.
This full-stack approach arguably puts Alphabet in the best position among AI companies. It can better control costs, avoid dependence on other companies, and optimize its TPUs for the Gemini model. This approach has allowed Alphabet to improve efficiency while scaling up. Case in point, it lowered Gemini serving costs by 78% in 2025.
Impressive growth
Alphabet is also coming off a very successful 2025. Revenue was up 15% year-over-year to $402.8 billion, which is a good increase for a company that's already a tech giant. Google Cloud outperformed, with revenue from that segment jumping 34% to $58.7 billion. Google Cloud also has a $240 billion revenue backlog, indicating that there's strong demand for Google's enterprise AI infrastructure.
On the consumer side, Gemini 3 is a significant step forward that puts Google's AI assistant on par with OpenAI's ChatGPT and Anthropic's Claude. Alphabet CEO Sundar Pichai reported last month that the Gemini app has 750 million monthly users. Through a partnership with Apple, Gemini will also help power the Siri voice assistant on Apple devices.
Reasonably priced
I wouldn't say it's cheap to invest in Alphabet stock, but it also doesn't have the kind of sky-high valuation seen with many AI companies. Shares trade at 28 times earnings as of March 9, lower than the tech-heavy Nasdaq-100, which trades at 36 times earnings.
When you're investing a large amount of money, like $5,000, growth potential and risk management are both important factors to consider. Alphabet provides a solid balance between the two, with its AI stack driving growth and the many profitable businesses in its umbrella providing security for shareholders.
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Lyle Daly has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, EMCOR Group, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
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