More than 500 years ago, the Age of Discovery began as famous explorers crossed the oceans and opened new trade routes connecting the Americas, Africa, Asia, and Europe.
And it all happened because of two major forces:
- Key shipbuilding innovations
- The potential for enormous profits in the spice trade
Today, we are living through a similar Age of Discovery for artificial intelligence (AI). Key technological breakthroughs (machine learning, large language models, etc.) are combining with skyrocketing commercial demand, thanks to the popularity of generative AI applications like ChatGPT and DALL-E.
As this process continues and expands, there is one company that is best positioned to benefit from both sides of the AI Age of Discovery. It is -- figuratively speaking -- both a shipbuilder and an explorer.
It's Alphabet (GOOG -1.07%), and here's why I think it is the top AI stock to buy hand over fist right now.
Image source: Getty Images.
Alphabet's research and development are leading the way on AI
Let's start with the "shipbuilding." In the case of AI, that means the actual technological breakthroughs that will make AI better, faster, and smarter -- in short, the research and development.
Here, Alphabet is one of the world's leading players. Consider its research in quantum computing. The company is currently pioneering the development of quantum computers that could considerably surpass the processing power of today's most advanced supercomputers.
As renowned physicist Michio Kaku puts it: "We're looking at a race, a race between China, between IBM, Google, Microsoft, Honeywell, all the big boys are in this race to create a workable, operationally efficient quantum computer. Because the nation or company that does this, will rule the world economy."
In addition to its work on quantum computers, Alphabet is also banging away at another potential breakthrough: general AI. Back in April, the company announced it was combining its DeepMind and Google Brain divisions into a single unit with the goal of "bold and responsible development of general AI."
Alphabet is also a leader in the commercialization of AI
But Alphabet's leadership doesn't end with research and development. Thanks to its numerous applications and its massive scale, Alphabet can quickly roll out new AI innovations to billions of users in the blink of an eye. In fact, the company already has numerous AI software enhancements deployed or in the works:
- Google Generative AI Search
- Google Translate
- Google Ads (AI-driven ad selection and placement)
- Google Photos (AI editing and search)
- YouTube (AI-driven recommendations and captions)
- Google Assistant
- Google Bard
- Gmail (AI spam filtering)
True, not all of these innovations drive revenue for the company. But considering Alphabet's enormous reach, some present a rich vein of revenue and profits that the company could tap in the future.
Alphabet is therefore benefiting from both sides of the AI Age of Discovery. Its researchers and scientists are hard at work driving AI innovation, while at the same time, it is turning those laboratory breakthroughs into practical commercial products.
Add in the company's excellent fundamentals -- it recorded a whopping $297 billion in revenue over the last 12 months -- and it's clear: Alphabet is an AI powerhouse worth buying hand over fist.
