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Analyst Says Alphabet (GOOG) Becoming AI Leader Amid ‘Forced’ Innovation Away from ‘Drug of Monetization’

We recently published 10 Stock News You Should Not Miss as Tom Lee Reiterates Bullish Market Outlook Amid AI Catalysts. Alphabet Inc (NASDAQ:GOOG) is one of the stock news you should not miss.

Scott Devitt from Wedbush said in a recent program on Schwab Network that Alphabet Inc (NASDAQ:GOOG) seems to have become an AI leader from an AI laggard. He believes the AI revolution forced the company to innovate.

“This company’s original mission was to organize the world’s information and make it universally accessible and useful. I guess I would argue that at points in time, when it lacked competition, it maybe got caught up being addicted to the drug of monetization. This whole new wave of innovation actually has the potential to be a net positive for Google because it’s forcing this giant to act in ways it wouldn’t naturally have done on its own, and it has all the assets to be very competitive. You’re seeing that with the integration of AI overview into search results and really throughout the entire platform now that this AI innovation wave is underway. Business multiples have already expanded a little bit from 17 to the low 20s, more on par with where Meta trades now. On an ongoing basis, this company has the ability to grow revenues in the low double digits with some operating margin expansion over time. So you get about a 15% operating income growth rate and a stock that probably has a return similar to that over the next 3 to 5 years on an annualized basis.”

Alphabet is in a strong position to develop an AI ecosystem around search and Cloud. Businesses around the world are migrating to Google Cloud. Alphabet’s cloud margin rose to 20.7% in the second quarter from 11% last year. Google Cloud chief said earlier this year that the business has a backlog of $106 billion, and it’s “growing faster than our revenue.”

Photo by Firmbee.com on Unsplash

According to data from SimilarWeb, ChatGPT’s market share in AI chatbot traffic is shrinking despite being a leader. Gemini, on the other hand, is growing fast and has quadrupled its market share in the last six months.

SaltLight Capital stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its second quarter 2025 investor letter:

“To illustrate our approach to navigating these uncertainties, we turn to our recent investment in Alphabet Inc. (NASDAQ:GOOGL), which exemplifies balancing innovation risks with established strengths.

Innovator’s Dilemma: Google is grappling with an Innovator’s Dilemma as it protects its $200 billion search business from a significant technological shift. To put it plainly, Google Search’s primary purpose is to act as a ‘match-maker’, guiding users to the best source for their query on the open web. However, artificial intelligence is changing this role, with AI handling much of the searching, synthesis, and answering for the user, reducing the need to visit destination websites to gather information. A natural tension is emerging.

Humans naturally gravitate towards the path of least resistance, increasingly depending on AI to undertake cognitive tasks for them. This development poses challenges for content providers and for Google itself, which derives advertising revenue from these interactions…” (Click here to read the full text)

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.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

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.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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