This Is the Smartest Artificial Intelligence (AI) Stock to Buy With $500 Right Now
Key Points
Alphabet is engaged in both the hardware and software side of the AI industry.
Its hardware and software are in use by major competitors like OpenAI, Anthropic, and Apple.
The company is growing quickly for its size, it's profitable, and it's stable.
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There are many companies involved in the artificial intelligence (AI) industry. It can be hard for an investor to know what to put their money into.
But for a one-ticker play to invest in the whole of the AI industry, Google's parent company Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) makes a good case for itself.
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It is, after all, the only large AI player operating in both the software and hardware ends of the industry through its Google Gemini AI platform and tensor processing unit (TPU) hardware.
Image source: Getty Images.
Full-spectrum play
First let's talk about Gemini, which has carved out a decent chunk of the market for itself. Since 2023 it has grown from 7% share in the enterprise large language model (LLM) market to 21% and is set to overtake OpenAI's ChatGPT this year if the trend continues.
The software also forms the basis of Alphabet's "Magnificent Seven" peer Apple's AI program. The partnership turned what could have been one of Google's largest competitors into a customer.
On the hardware side of the equation, Alphabet's TPU hardware represents one of the first real competitors to Nvidia's graphics processing unit (GPU).
And, while Anthropic's Claude might have a greater share of the enterprise LLM market at 40%, Anthropic announced late last year that it would be adding over a gigawatt of computing capacity online with Alphabet TPU chips.
While Claude might compete with Gemini in terms of software, it will be running in part on Google hardware. OpenAI is also looking to use TPU chips to power its software. So, Alphabet is a strong contender on both ends of the AI play.
It also has the financials you'd expect from Google's parent company.
Alphabet generated $402.8 billion in revenue for 2025, up 15% over 2024 which is very fast growth considering the company's sheer size. It also runs a net profit margin of 32.8% and has a very healthy debt-to-equity ratio of 0.14.
So, if you're looking for a safe, stable, all-in-one AI play, give Alphabet a look.
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James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
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