1 Artificial Intelligence (AI) Stock That Should Be on Every Investor's Holiday List

Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) have surged to new highs in 2025 following strong financial results. The company is well-positioned to monetize its artificial intelligence (AI) investments across both enterprise and consumer markets, which puts the Google parent in a uniquely strong competitive position.

Despite the stock's 67% year-to-date gain, it still trades at a reasonable valuation that can deliver outstanding returns in 2026 and beyond.

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Why buy Google stock?

Alphabet stock is surging as revenue growth accelerated this year, with a 16% year-over-year increase in the third quarter. All the company's businesses, including Search, subscriptions, and cloud computing, are posting strong growth heading into the fourth quarter.

"We are seeing AI now driving real business results across the company," CEO Sundar Pichai said. Revenue from products built with generative AI is growing rapidly, up over 200% year over year, and more than 70% of existing Google Cloud customers are utilizing AI tools.

Despite the stock's recent move, you haven't missed the boat. The stock is trading at 29 times 2026 earnings estimates, with analysts projecting 16% annualized earnings growth over the next several years. This remains a reasonable forward price-to-earnings multiple for an elite growth stock. The expected earnings growth, which is below Alphabet's recent 35% year-over-year increase in Q3, is enough to double the stock by the end of the decade.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.