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Written by James Hires for The Motley Fool->
Google's parent company is uniquely positioned on both the hardware and software sides of the AI market.
The company's technology has been adopted by OpenAI, Anthropic, and Apple to fuel their own AI endeavors.
Alphabet has more money than most of its competitors to grow its AI program, and that's even more obvious after a stellar 2026 first quarter.
I doubt I need to tell you that artificial intelligence (AI) has been the story of the stock market since ChatGPT went live in November 2022. Since then, I don't think a day has gone by that the subject hasn't come up in the financial media in some form. And now there are dozens, if not hundreds, of AI stocks for an investor to choose from.
But one stands out above them all: Google's parent company, Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL). If you're looking for one stock that lets you play as much of the AI sector as possible, Alphabet is it.
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The company is uniquely positioned on both the hardware and software sides of the AI industry, and it has been quietly asserting its dominance in the space for years. Now, it seems like its efforts are truly beginning to bear fruit.
There's a very good chance you've interacted with Google, or with Alphabet's other big brand, YouTube, in the past 24 hours. And the parent company's existing business operations with Google and YouTube have given it more resources to pour into its AI projects than just about anyone else in the tech sector.
It was one of the original tech giants of the dot-com boom, and it's shaping up to be the biggest winner in the AI boom. The reasons are threefold:
Alphabet's premier AI product is the Gemini platform. It's a direct competitor with the likes of OpenAI's ChatGPT and Anthropic's Claude, and it's gaining serious ground in that space.
According to the venture capital firm Menlo Ventures, in 2023, Google Gemini had just a 7% share of the market in enterprise large language models (LLMs). It was the smallest player, behind even Meta. But by the end of 2025, Gemini's market share had tripled to 21% while Meta's had fallen to 8%.
Gemini is likely to overtake ChatGPT this year if the trend continues, since the latter has fallen from 50% market share in 2023 to 27% in 2025.
Google's hardware is no less impressive. The company's tensor processing unit (TPU) is an AI chip it co-developed with Broadcom. The chip is optimized for slightly different things than Nvidia's graphics processing unit (GPU) is, but it does represent one of the only real competitors to Nvidia's near-unchallenged AI hardware dominance.
While it's a long way off from unseating Nvidia as the AI hardware kingpin, the TPU is seeing rapid adoption.
Anthropic announced late last year that it would be spending tens of billions of dollars to bring one gigawatt of computing power in TPUs online in 2026. And OpenAI is also beginning to work with Google's TPUs.
But those aren't the only businesses relying on Google's AI technology.
Earlier this year, Apple was one of the only big tech companies to not have its own major proprietary AI program. That changed in mid-January when it was announced that the company would be collaborating with Google to address that problem.
Apple will be basing the foundation model for its Apple Intelligence AI system on Google's Gemini model and using Google's cloud computing services.
The iPhone maker already works with OpenAI to integrate ChatGPT into Siri. But now, Siri will be an AI program in its own right -- one based on Gemini code as opposed to something of Apple's own design.
Whether Apple will still develop its own proprietary system in the future or rely on Google in the long term remains to be seen.
But for the time being, Google's AI program will be running natively on the single most popular smartphone in the world, which controls 25% of the market.
Even if OpenAI and Anthropic chose to challenge Alphabet directly rather than integrate its hardware and work with it, they wouldn't have a chance. Neither company has turned a profit yet. Meanwhile, Google is, well, Google.
For the company's 2026 first-quarter results, it reported revenue of $109.8 billion, up 22% year over year. Net income grew 81% over the same period, and its earnings per share (EPS) surged 82%.
On top of that, Alphabet grew its net profit margin from 32.8% at the end of 2025 to 37.9% at the end of the 2026 first quarter.
The company also maintains a very healthy total debt-to-equity ratio of 0.19, even with the tens of billions of dollars that it and its big tech peers are now spending on data centers and other AI hardware.
Put all this together, and you have a company with both the market position and the means to utterly dominate AI. That's something worth your consideration, if I do say so myself.
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James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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