Correction or Not: This Artificial Intelligence (AI) Stock Is Worth Buying for the Long Haul

Google’s AI competence is simply not up for discussion. I’m talking about a proven leader here, with an enormous amount of engineering and financial resources to throw behind the next big idea.

Google (and Alphabet) has been very kind to longtime investors. If you invested just $1,000 when Google hit the stock market in August 2004, that investment would be worth more than $63,700 on May 13, 2025.

Still, the stock has never looked overvalued. Even now, about two and a half years into the ChatGPT-powered AI boom, Alphabet’s valuation ratios look downright affordable. AI rivals like Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA) can’t hold a candle to Alphabet’s value-investing appeal:

Data collected from Finviz.com on May 13, 2025.

Alphabet’s stock price could double and still compare favorably to Microsoft and Nvidia’s valuation ratios. I’ll agree that Nvidia has earned its premium price via unbeatable business growth, but Alphabet’s sales and earnings are rising faster than Microsoft’s. Is Alphabet’s stock undervalued or Microsoft’s overpriced? You be the judge.

Let’s just say that I only own one of these two AI stocks, and my choice isn’t headquartered in Redmond, Washington.

Alphabet has come a long way from the Stanford garage of its youth, and it’s still a thrilling growth story. With or without broad market corrections along the way, I’m almost always a buyer of Alphabet’s stock. It’s only more tempting in times like these, as the stock trades 23% below February’s all-time highs.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Correction or Not: This Artificial Intelligence (AI) Stock Is Worth Buying for the Long Haul was originally published by The Motley Fool