1 Artificial Intelligence (AI) Stock That Should Be on Every Investor's Holiday List

Alphabet shares hit new highs in 2025 after a strong Q3 — revenue rose 16% year‑over‑year while revenue from generative‑AI products increased over 200% and CEO Sundar Pichai said more than 70% of Google Cloud customers are using AI tools — signaling AI is beginning to drive material monetization across both consumer and enterprise businesses. The stock is up roughly 67% year‑to‑date but still trades near 29x 2026 earnings with analysts projecting about 16% annualized earnings growth, a valuation the article describes as reasonable for a high‑quality growth name and one that could support strong returns over the next several years. These results underscore Alphabet’s competitive position to commercialize AI broadly and reinforce its case as a core holding for investors seeking exposure to AI-driven secular growth.

Analysis

Shares of Alphabet reached new highs in 2025 after the company reported a third-quarter revenue increase of 16% year‑over‑year and said revenue from products built with generative AI rose over 200% year‑over‑year, while CEO Sundar Pichai noted that more than 70% of Google Cloud customers are using AI tools — evidence the company is beginning to monetize AI across consumer and enterprise businesses. The stock is up roughly 67% year‑to‑date but the article characterizes the shares as reasonably valued at about 29 times 2026 earnings estimates, with analysts projecting roughly 16% annualized earnings growth over the next several years. That analyst growth projection is noted as below Alphabet’s recent 35% year‑over‑year increase in Q3, yet the piece argues the forward multiple and expected growth could support a doubling of the stock by the end of the decade. Market sentiment in the coverage is strongly positive with a moderate market‑impact score, but the Motley Fool’s Stock Advisor did not include Alphabet in its current top‑10 list, highlighting that selection frameworks differ and that continued execution on AI monetization and Cloud adoption are the key catalysts and monitoring points going forward.

Key Decisions for Investors

• Consider establishing or maintaining a core position in Alphabet to capture AI-driven secular growth given 200%+ YoY generative AI product revenue and >70% Google Cloud AI adoption, but size exposure recognizing the stock is already up ~67% YTD
• Employ phased buying or use option-based hedges to manage downside risk around a ~29x 2026 earnings multiple and analysts’ ~16% annualized EPS growth assumption
• Monitor quarterly triggers closely — generative AI product revenue growth, total revenue and EPS versus analyst projections, and the percentage of Cloud customers using AI — as validation for the growth/valuation thesis
• Re-evaluate relative allocation versus alternative high-conviction names (the article notes Stock Advisor omitted Alphabet from its top‑10) before increasing concentration in the name