Alphabet's shares surged by more than 240% in the past five years, driven by dominant businesses like YouTube and Google Search, attracting massive web traffic and ad revenue, with potential AI leverage for further growth.
Alphabet's modest valuation, trading at just under 30 times earnings compared to rivals like Microsoft and Amazon, poses an advantage, potentially leading to stronger returns in the long run without excessively inflated valuation.
The impact of AI on Alphabet's business is crucial for its future growth, with the need to demonstrate that AI will enhance rather than diminish the company's services, like Google Search, to secure its value and sustained growth.
Alphabet's growth rate has been accelerating recently, but its future performance is heavily dependent on effectively leveraging AI to enhance its existing services and mitigate any potential negative impacts on its business model.
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