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So, even if Google's software doesn't dominate the enterprise LLM market, the market leader is going to be using plenty of Alphabet's hardware, so it wins either way.
Gaining popularity
Furthermore, the data centers that AI requires to run aren't cheap to build. That has seen Alphabet and others like Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), and Microsoft (NASDAQ: MSFT) announce they will be spending hundreds of billions of dollars this year to expand their data center capacity.
Of those four companies, only Alphabet and Meta have mass-market generative AI products, and only Alphabet's are competitive, as Meta controlled 16% market share in 2023 but has since halved its share to 8%.
So, while Amazon and Microsoft have the same kind of money to throw around that Alphabet does, neither has a direct competitor to Gemini or their own answer to the TPU chip.
Neither Anthropic nor OpenAI has achieved profitability, and both are a few years away from it at least. So there is no way they can out-spend Alphabet. That all paints a picture of a clear path for Alphabet to AI market dominance.
And its latest results show that Alphabet's AI strategies are already paying off handsomely.
One of the biggest and richest fish in the pond
For the whole of 2025, Alphabet saw its revenue climb 15%, exceeding $402 billion. Net income for the year topped $132 billion, a 32% increase over 2024. The company's diluted earnings per share (EPS) shot up 34% as well.
Alphabet also grew its cash and cash equivalents 32% to $126.8 billion, as of the end of 2025, with long-term debt of $46.5 billion and total debt of $59.29 billion. So it could easily pay off all its debt with one check, which is an ideal balance sheet as far as I'm concerned.
In all, Alphabet managed a gross margin of 59.65% for 2025 along with an operating margin of 32% and a net margin of 32.8%. So even with rising costs associated with data centers, it has a massive cushion of profit before those costs start to become burdensome.
There are no sure things in investing, but Alphabet might be one of the closest things to it. Give the company a look if you want to make a safe bet that's likely to pay off.
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James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Want to Make a Bet? Skip Polymarket and Buy This AI Stock Instead. was originally published by The Motley Fool
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