"The move today comes as news broke that Meta is reportedly in talks with Alphabet's Google to buy AI chips from it. Alphabet is the highest quality AI play. The news highlights the attractiveness of Alphabet stock as a means to capitalize on the AI boom. A quick look at its cash flow and remarkable cash levels, compared to one of its peers, demonstrates the ease with which it can finance the substantial investment required to grow its AI capabilities."
"Moreover, it's already demonstrating its ability to grow its cloud computing services with Google Cloud revenue up 34% year over year in the third quarter, and operating income up 85% to $3.6 billion - a figure now more than 10% of what it earned from Google Services (search, advertising, and subscriptions). Speaking on the earnings call, CEO Sundar Pichai noted that Google Cloud's "product portfolio is accelerating growth" and it had "signed more deals over $1 billion through" the first nine months of 2025 ""
Alphabet's AI momentum lifted its stock amid reports that Meta is in talks to buy AI chips from Google. Robust cash flow and large cash balances enable Alphabet to fund substantial AI investments more easily than many peers. Google Cloud revenue grew 34% year over year in the third quarter, while operating income jumped 85% to $3.6 billion, exceeding 10% of Google Services earnings. Sundar Pichai said Google Cloud's product portfolio is accelerating growth and that the company signed more than $1 billion deals through the first nine months of 2025 than in the prior two years combined. More than 70% of Google Cloud customers use its AI products, underscoring Alphabet's multifaceted monetization across search, advertising, and cloud and its position as a high-quality AI investment.
Read at The Motley Fool
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