With a market cap of $1.7 trillion, Alphabet (GOOG 9.96%) (GOOGL 10.22%) is undoubtedly one of the most dominant enterprises on the planet. Riding the growth of the internet, the business is one of Silicon Valley's most prominent success stories.

Unsurprisingly, this FAANG stock has made for a wonderful investment. A $1,000 cash outlay 10 years ago would be worth more than $4,500 today, translating to a return of 351%. This gain far exceeds what the Nasdaq Composite index produced.

Let's take a closer look at Alphabet's past. And for investors who missed the boat, it might not be too late.

Gateway to the internet

Alphabet's bread-and-butter product, Google Search, was created decades ago as a way to organize the world's burgeoning information set, making it more accessible to people. In many ways, this can be viewed as a key innovation that spurred greater usage of the internet.

Moreover, Google Search's dominance, as characterized by its nearly 92% share of the worldwide market, has led to a totally new industry being created in search engine optimization. Businesses of all sizes that want to reach their audiences gravitate toward Alphabet's digital ad tools.

Even after all these years, Search is still a key financial driver. It generated 57% of Alphabet's $307 billion of revenue in 2023.

Of course, this company has a lot of other popular internet properties under its belt, all of which have risen in importance over the years to make Alphabet what it is today. There are services like Gmail, Maps, YouTube, and Android. In total, the business has 15 products that are each used by at least 500 million people. This type of adoption is unmatched.

The result is an extremely profitable enterprise. In the last three years, Alphabet has generated almost $200 billion of free cash flow. And it currently has $111 billion of cash, cash equivalents, and marketable securities on the books versus debt of just $13 billion. There aren't many companies out there that possess this kind of financial standing.

Alphabet of the future

As we look at this business over the next 10 years, I'd suspect that Search will continue to be a major aspect of the operations. The advent of artificial intelligence might shake things up a bit. But given Search's commanding market share, as well as the prevalence of all the company's other offerings, Alphabet is in the best position to harness the power of this revolutionary technology to maintain its competitive position.

Investors do need to pay attention to Google Cloud. Revenue for the world's third-largest cloud platform service provider jumped 26% in 2023, faster than the business overall. And this segment reported four straight quarters of positive operating income. By 2034, Google Cloud is poised to be a much bigger sales and profit driver.

In the last 10 years, Alphabet saw its revenue and net income increase at compound annual rates of 17.7% and 19%, respectively. This strong fundamental performance certainly contributed to the stock's impressive run.

Over the next three years, analysts are forecasting revenue to rise at an annualized pace of 11%, with earnings per share growing 15.2% per year. Should these estimates come to fruition, it would result in a continuation of historical trends, which is exactly what shareholders would want.

The stock has come down in the past few weeks. It now trades at a forward price-to-earnings ratio of just 20.3. That represents a massive discount to the tech-heavy Nasdaq-100 index, which has a forward p/e of 30. And it sets up prospective investors to achieve market-beating returns in the years ahead.