Editor's note: Welcome to Top Stocks. This is the new name, look, and feel for This Week on Wall Street.
In these pages – and with the accompanying video interviews – we're going to dive deep on the market's best stocks.
These are the companies you need to know about in order to navigate today's complex investing environment. Their businesses reflect what's going on in the world... and the opportunities that abound.
To start, we'll cover one of the most important businesses in the modern era... Alphabet (GOOGL).
As always, thank you for putting your trust in Stansberry Research and for joining us in this transition.
Our Top Stock this week is Alphabet, the parent company of Google.
You can think of it like the "front door" to the Internet. It dominates search... and also e-mail, navigation, video streaming, digital advertising, mobile operating systems – the list goes on.
The company has seven different tech products that each boast more than 2 billion monthly users.
That's the Google search engine, Android operating system, Google Maps navigation tool, Google Chrome web browser, YouTube streaming service, Google Play app store, and Gmail e-mail service.
That's a lot of eyeballs that advertisers are dying to reach. And they'll pay top dollar to reach them. Last year, Alphabet's advertising revenue came in at $342 billion – up 12% from 2024.
In short, Alphabet is capturing more and more of the economic value created online. And the more its earnings grow, the more investors reward shares. GOOGL stock is up roughly 75% over the past 12 months...
Importantly, Alphabet is driving the cost to acquire customers up.
Online advertisers have few places to go other than Google and Meta Platform's (META) properties like Facebook and Instagram. The rates on these ad platforms have consistently climbed upward for years. And Alphabet is capturing a huge and growing revenue stream in the process.
The company just crossed $400 billion in annual revenue. And it clocked $73 billion in free cash flow, even as it continues to spend billions on artificial intelligence.
That brings me to my next point...
Understand Alphabet, and you'll understand a lot more about the AI boom (and what comes next) than other investors...
Three Things to Know About Alphabet
AI Is Not Killing Google Search
When OpenAI's ChatGPT came out, Alphabet's stock fell.
Investors feared AI would kill Google Search... because why would anyone scroll through pages of links on Google when you could get a simple, quick response from ChatGPT?
It made sense... on the surface. But investors were completely wrong.
What most people missed was that Google invented the technology that makes ChatGPT possible. The 2017 research paper that launched the entire large language model ("LLM") era – "Attention Is All You Need" – came out of Google.
Researchers at Google had essentially built their own version of ChatGPT and chose not to release it. They didn't think it was ready. Or they didn't realize the commercial potential. So OpenAI beat them to the punch.
But Alphabet followed quickly with Bard, which was renamed Gemini. Gemini allows Alphabet to integrate AI into search with things like "AI mode" and "AI Overviews."
Today, Gemini tops the AI leaderboards. Both Gemini 3 and 3.1 releases showed strong results and proved Alphabet's models were as good as those from OpenAI or Anthropic.
Now, Alphabet's search metrics are up. Advertising revenue is up. And the stock has soared.
The takeaway is simple: Alphabet has been an AI company for more than a decade. And it's doing the work to stay on top.
Alphabet Doesn't Need to Win AI – It Just Needs to Play the Game
Here's the thing about AI models... They're all going to end up roughly the same.
In a few years, you probably won't care whether you're using Gemini, ChatGPT, or Anthropic's Claude. The models are converging. This will become a commodity business.
That's great news for Alphabet. Because the value will come from its massive customer base.
Like the company did with Gemini and Google Search, it can just drop AI capabilities straight into the Alphabet products billions of people use.
YouTube already has AI creator tools built in. Gemini is already inside Google Workspace. Apple (AAPL) – which used to be paid by Google to carry its search engine – is now paying Google to put Gemini into Apple Intelligence on iPhones.
When every AI model is equally good, the winner won't be the best model. It'll be the one that can deliver AI directly to the most customers. And here, Alphabet has a huge advantage over the competition.
The Trillion-Dollar Chip No One Talks About
Everyone knows about chipmaker Nvidia (NVDA).
It has led the boom in graphics processing units ("GPUs")... sees insane demand for chips to train AI models... and (thanks to that demand) is now the most valuable company in the world, with a $4.4 trillion market cap.
What almost nobody talks about is how Google has been quietly building a competing chip since 2013 – one that's 50% to 70% more efficient than Nvidia's.
Google's chips are called tensor processing units ("TPUs"). They were built specifically for machine learning when real-time voice search was gaining popularity.
The company realized that if users made just a handful of voice queries a day, it would overwhelm its servers. So Google built its own silicon chips to handle the workloads. And it turned out to be cheaper and more efficient than GPUs.
Google has been refining its TPUs for over a decade with in-house engineers and in partnership with chipmaker Broadcom (AVGO). And until recently, it kept its chips all to itself.
Now, it's sharing its TPUs with outside companies. Early customers include Meta Platforms and Anthropic. And both companies are in talks to spend billions of dollars on Google's TPUs.
Alphabet already spends an estimated $20 billion a year on TPUs just for its own data centers. If broader adoption follows, this business alone could sport a trillion-dollar valuation.
Alphabet is a $3.7 trillion company. There's a realistic argument that a single product line most investors haven't thought about (Google's TPUs) could add another trillion to that valuation.
All Alphabet needs to do is sell its chips externally, and it'll have yet another major growth business in its stable.
Should I Buy Alphabet A-Shares or C-Shares?
Alphabet has two classes of publicly traded shares: A-shares (under the ticker GOOGL) and C-shares (under the ticker GOOG).
For everyday investors, there's almost no difference. The shares have the same "economics" and should deliver nearly identical returns. Larger investors can convert shares to keep the prices in line.
The Class A shares, however, do come with voting rights. The Class C shares do not. But while voting and corporate governance are important on the whole, and in the long term, they don't matter much to an everyday investor in a $3.7 trillion company.
In short, it doesn't matter whether you invest in A-shares or C-shares. Either one will do the same for you. The Class A shares (GOOGL) have slightly more volume, which suggests you'll get a better "fill" on your order. But Class C shares have plenty of volume as well.
Watch to Learn More
To learn more about Alphabet, check out today's Top Stocks video. I bring in John Engel, the lead equity analyst for Stansberry Innovations Report. We cover everything you need to know about Alphabet, its AI ambitions, and the outlook for its stock.
You can watch the entire episode on our YouTube page by clicking the image above. Be sure to like and subscribe to get more of our videos.
Straight to the Source
- Alphabet's most recent earnings presentation
- Alphabet's most recent earnings call transcript
- Alphabet's most recent annual report
Until next week,
Matt Weinschenk
Publisher and Director of Research
What do you think about Top Stocks? Send any and all feedback to thisweek@stansberryresearch.com. We read every e-mail you send in.
