The AI Stock I'm Buying for My Retirement Portfolio -- and Why It Has Nothing to Do With Hype
View original at nasdaq.comThe AI Stock I'm Buying for My Retirement Portfolio -- and Why It Has Nothing to Do With Hype Key Points Artificial intelligence (AI) has gone from a threat to Alphabet to an area of strength…
What we drew from this source
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Alphabet trades at 27 times forward earnings, comparable to Nvidia at 26 times forward earnings, making it not particularly expensive
60% confidenceStock Advisor's total average return is 986%, versus 208% for the S&P 500
60% confidenceAlphabet's trailing PEG ratio is below 0.7, indicating it is undervalued relative to its earnings growth
60% confidenceGoogle Cloud's backlog nearly doubled from the previous quarter to over $460 billion in Q1 2026
60% confidenceAlphabet is the best long-term value in the tech sector and the No. 1 stock in the author's retirement portfolio
60% confidenceYouTube is a key driver behind Google's 350 million paid subscriptions
60% confidenceGemini has clearly gotten much better over the last year, reflected in usage, even though the author personally still prefers Claude
60% confidenceAI Overviews had over 2 billion users per month
60% confidenceAlphabet's free cash flow over the trailing 12 months was $64.4 billion, which will be strained by $180-190B capex guidance
60% confidenceThe four major hyperscalers (Alphabet, Amazon, Meta Platforms, and Microsoft) forecast $600 billion to $700 billion in combined capex spending in 2026
60% confidenceWhat sets Alphabet apart is that it controls its entire AI stack — custom silicon, AI models, cloud computing, and a distribution layer through its existing products — making it far less reliant on other AI companies
60% confidenceThe author is not worried about Alphabet's capex spending because demand for computing power is skyrocketing and AI data centers can become another source of revenue
60% confidenceAlphabet's first-party AI models processed more than 16 billion tokens per minute via direct API use in Q1 2026, a 60% increase from the prior quarter
60% confidence
Data points we hold from this source
| NVIDIA Corporation · forward pe | 26 multiple |
| Alphabet Inc. · peg ratio | 0.7 multiple |
| Alphabet Inc. · forward pe | 27 multiple |
| Alphabet Inc. · paid subscriptions | 350 millions |