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Analyst Highlights New Upside for Alphabet (GOOG) Amid AI Search Threats

We recently published 10 Stocks to Watch Ahead of Q3 Earnings Season. Alphabet Inc. (NASDAQ:GOOG) is one of the stocks that Wall Street analysts are discussing these days.

Saira Malik, chief investment officer at Nuveen, said in a latest program on CNBC that Alphabet Inc (NASDAQ:GOOG) continues to be a leader in the AI space. She explained why she likes the stock:

“Looking at Alphabet, people are worried about what will the impact of OpenAI be on Google’s advertising business and genesis. I think the impact is not going to be as great as people think and you have the upside from Waymo and their YouTube business.”

Photo by Kai Wenzel on Unsplash

Alphabet Inc. (NASDAQ:GOOG) bulls believe concerns around AI-related threats to Google search are overstated. Google has an edge over competitors because it’s easier for the billions of users of its search engine to switch to Gemini instead of opting for a completely new model. As of April, Google had over 1.5 billion monthly users interacting with its AI-powered Search overviews.

Google’s competitor OpenAI failed to impress the market with its GPT-5 model, while Gemini is gaining traction with new features. Analysts believe the company is strongly positioned to start placing ads in AI search results, which means its core ads business will not be impacted despite the decline in traditional search.

Lakehouse Global Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2025 investor letter:

“We’ll wrap things up with Alphabet Inc. (NASDAQ:GOOG) , which in similar fashion to Hemnet, only experienced a marginal share price decline over the year. That said, Alphabet did meaningfully underperform our average portfolio return as concerns that it’s near monopolistic position in Search (which generates the majority of their advertising revenue) could be eroded by new Artificial Intelligence (AI) alternatives like ChatGPT and Perplexity. When it comes to the potential risks AI poses to the dominance of search, our view is a balanced one. No doubt uncertainty has increased but we believe Alphabet remains well positioned through its massive user distribution (9 products with over 1 billion users each) and long-standing investments and leadership in AI (DeepMind and Google Brain).

Alphabet is innovating fast and has already successfully rolled out their own AI powered search function, AI Overviews. To date, engagement has been encouraging with consumers searching more frequently, with more detailed queries and clicking through at higher rates. Management has noted that AI Overviews are monetising at the same rate as regular Search ads and, that as of April, AI Overviews had already reached 1.5 billion monthly users. This is a much larger base than ChatGPT and highlights the inherent distribution advantage Alphabet has by being able to directly integrate AI Overviews into the widely used Google Search engine.

Looking at current fundamentals, business momentum continues to be strong with revenue growing 12% year-over-year (14% constant currency) in the most recent quarter. This was driven by double-digit growth across Search, YouTube advertising, subscription platforms, and Google Cloud. Cost discipline efforts are also improving profitability, and operating margins have expanded steadily to 32.6%, up from 25.6% two years ago. With a relatively undemanding valuation of less than 20x forward earnings, we still believe the risk/reward for Alphabet is attractive. That said, it would be remiss not to acknowledge that the future dominance of Search is less certain today than it was a few years ago as the range of potential outcomes has widened. As such, we rightsized our position on strength earlier this year.”

While we acknowledge the risk and potential of GOOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GOOG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

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