Alphabet (GOOGL 0.46%) (GOOG 0.42%) is a stock most investors are at least somewhat familiar with. And given its performance of late, many investors are wondering if it's a stock worth investing in (or investing more in). Let's look at four things every investor needs to know about the Alphabet and its stock.
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1. Google search is still its main business
While Alphabet's cloud computing and other businesses have been gaining more attention, search is still its bread and butter. The company holds a dominant position in search, with about a 90% global market share.
Search revenue made up 55% of Alphabet's total in 2025. While artificial intelligence (AI) was initially feared to be disruptive to Google search, the company has embedded AI throughout its search business, helping drive growth. In Q4, its search revenue grew a robust 17%, and its search revenue growth accelerated every quarter last year.
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Key Data Points
2. The company has a wide search moat
Alphabet's big competitive moat in search comes from its distribution edge. Alphabet owns both the world's most widely used browser in Chrome and the most common smartphone operating system with Android. Both have about 70% market share. Meanwhile, the company has a search revenue-sharing deal with Apple to be the default search engine on its devices.
This essentially ensures that Alphabet is the gateway to the internet for most people in the world, outside China, where it does not operate.
3. Google Cloud is its biggest growth driver
While search is Alphabet's largest business, its cloud computing unit, Google Cloud, has been its biggest growth driver. However, the company is only the No. 3 cloud provider by market share, trailing Amazon's AWS and Microsoft's Azure by a pretty wide margin.
Google Cloud revenue has been surging due to AI demand, with revenue climbing 48% last quarter to $17.7 billion. The business has also been seeing huge operating leverage, with its operating income more than doubling last quarter from $2.1 billion to $5.3 billion.
4. TPUs give Alphabet a huge cloud computing advantage
Alphabet's custom AI chips, called tensor processing units (TPUs), give the company a big structural cost advantage over other cloud computing companies that largely rely on Nvidia's graphics processing units (GPUs). While other companies have or are trying to develop their own custom AI chips, Alphabet designed its TPUs more than a decade ago, and they are now on their seventh generation. They are tightly integrated into Alphabet's software and hardware infrastructure and have been battle-tested and optimized over the years. This is not something that is just matched when designing a new chip.
With this edge, the company is going all in on AI, committing to spend between $175 billion and $185 billion in capital expenditures (capex) this year to build out its AI infrastructure. That is about double the $91 billion it spent in 2025. Its TPUs have also proven to be so highly regarded that Anthropic has placed a $21 billion order with Alphabet partner Broadcom to deploy the chips for its use within Google Cloud for its AI workloads, opening up another big opportunity for Alphabet. The company also announced that Apple has chosen Google Cloud to help it develop its own AI models.
