Investors continue to pay close attention to the artificial intelligence (AI) boom, given the ongoing success of businesses in the space. The right course of action is to figure out ways to gain exposure in your portfolio, as this looks to be a durable secular trend.
There might be a lot of businesses to choose from. However, here's the smartest AI stock to buy with $1,000 right now.
Image source: Alphabet.
AI runs in this top tech company's DNA
Alphabet (GOOGL 0.78%) (GOOG 0.77%) is a top AI stock pick. That's because it has its hands in all areas of this technological tailwind. The company is involved in AI research, develops AI chips, runs a thriving cloud platform that sells AI services, provides AI features to ad customers, and integrates AI into its user-facing apps.
AI is undoubtedly a part of Alphabet's DNA.
NASDAQ: GOOGL
Key Data Points
Capital expenditures will keep growing
It was revealed in the latest quarterly release that Alphabet plans to spend $91 billion to $93 billion on capital expenditures in 2025, up from previous guidance. This money will go toward expanding the company's technical infrastructure, such as servers and data centers. "Looking out to 2026, we expect a significant increase in CapEx," CFO Anat Ashkenazi said on the Q3 earnings call.
Investors might be skeptical about all this spending resulting in adequate returns. However, it helps that Alphabet is so profitable, generating $24.5 billion in free cash flow in the third quarter. The business is aggressively pushing ahead when it comes to AI.
