Alphabet (GOOGL 10.22%) (GOOG 9.96%) easily beat Wall Street expectations in the second quarter (ended June 30), posting revenue of $74.6 billion and adjusted diluted earnings per share of $1.44. This was the second straight financial update that exceeded consensus analyst estimates, which likely helps explain why shares are up 53% in 2023 as of Sept. 7. 

But is now a good time to buy Alphabet stock? Here are two must-know reasons why adding this FAANG company to your portfolio is a smart idea, even after its monumental rise this year. 

1. Alphabet's dominant position 

Alphabet's success is demonstrated by just how dominant its industry position is.

For example, the business commands 27% of the domestic digital advertising market, a lead it has had for quite a long time. In the latest quarter, 78% of Alphabet's $75 billion in total revenue was represented by ad sales. But there's still lots of growth potential, as this market is expected to increase at a compound annual rate of 14% by 2030. It's difficult to not see Alphabet still leading the way well into the future. 

The company's domination is most apparent when analyzing specific products and services. Google Search, Alphabet's bread and butter, which still drives most of the financial performance, has a 92% share in the search market.

That's a ridiculous lead, significantly ahead of Microsoft's Bing, which is in second place. Even ChatGPT's integration with Bing hasn't done much at all to move the needle for the far less popular search engine. It shows how much better Google Search really is. 

Android, another top Alphabet service, has a 71% share of the global mobile operating system market. "With 15 products that each serve half a billion people, and six that serve over 2 billion each, we have so many opportunities to deliver on our mission," CEO Sundar Pichai said. These monster figures help explain Alphabet's power. 

With such an expansive and thorough presence in the digital world, investing in Alphabet's stock is essentially betting on the ongoing growth of the internet. More specifically, the increasing amounts of data generation, as well as rising internet usage, should provide the company with a powerful tailwind. 

Of course, a dominant position invites regulatory headaches, as Alphabet knows all too well, given the sizable fines it has paid in the past.

However, a rebuttal to someone who might say that the constant threat of regulation is a major risk is that consumers and businesses aren't being forced to use Alphabet. On the contrary, its products and services are clearly the best that are available on the market by a long shot. And this superiority makes being a customer an easy decision. 

2. Alphabet's network effects 

Buying businesses that possess some sort of economic moat is crucial to improving the chances that your portfolio performs well over the long term. Alphabet's greatest competitive advantage comes from its powerful network effects. 

Google Search basically operates a three-sided platform, which consists of users like you and me, suppliers (websites), and advertisers. The growth of any one of these immediately increases the value for the other two. Even more noteworthy is that Search becomes even better the larger it gets, making it virtually impossible for a rival service to compete effectively. 

The same dynamic applies to YouTube, with viewers, content publishers, and advertisers as the key stakeholders. As more content is uploaded to the site, viewers have more stuff to watch. As more eyeballs go to YouTube, advertisers are willing to pay more to target this audience.

The platform's dominance is illustrated by the fact that it accounted for 9.2% of daily TV viewing time in the U.S. in the month of July, more than streaming pioneer Netflix. 

Alphabet's wide economic moat, coupled with its dominating position as the gateway to the internet, makes the stock a no-brainer buy right now.