Alphabet Inc. (GOOGL) Leverages Gemini AI and Waymo Growth To Fuel Next Wave of Innovation

We recently published a list of 10 AI Stocks That Will Skyrocket. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against other AI stocks that will skyrocket.

AI (Artificial Intelligence) isn’t just a buzzword anymore—it’s becoming a part of our everyday lives, from the apps we use to how businesses operate. For investors, that means opportunity. As AI continues to grow, some companies are leading the charge and showing real potential for long-term gains. Whether you’re looking to diversify your portfolio or tap into the future of tech, this article will walk you through some of the best AI stocks worth watching right now. AI stocks saw incredible gains over the last couple of years, particularly in 2024, as AI applications burgeoned. The current weakness in AI stocks, caused by geopolitical tensions, may be a good opportunity to load up on AI stocks.

AI is Likely to Have a Myriad of Applications

In an interview with CNBC, the CEO and CIO of Ark Invest, Cathie Wood, underscored her bullishness on the AI sector despite the recent weakness in those stocks. According to Wood, AI has a massive runway. She compared the current AI position to the internet in the early to mid-90s. Wood is optimistic about robotaxis in the near term and the application of humanoid robots in the long term. However, the most under-appreciated application of AI, according to Wood, is healthcare, as AI will accelerate the curing of diseases. Within the medical application of AI, Cathie Wood is particularly bullish on sequencing technology, which is used to read DNA. AI is a great application in sequencing as it helps analyze, interpret, and act on that genetic data much quicker and more accurately than traditional methods.

A segment within AI that is hot right now is Generative AI. Generative AI creates customized answers for the user based on real underlying data. Gen AI has created a massive investment cycle of over $200 billion annually, led by the ‘magnificent 7’. The tech behemoths are competing intensely over leadership in Gen AI. Meanwhile, an upcoming AI theme centers on how large language models (LLMs). According to Morgan Stanley, leading companies behind the most advanced LLMs are prioritizing high-performance chips and top-tier software to deliver AI solutions that are becoming essential for both businesses and consumers. While initial LLM use cases primarily included content creation, summarization, and categorization, industry leaders believe that the greatest yet-to-be-realized opportunity lies in applying AI reasoning to enterprise data.

Our Methodology

To compile the list of AI stocks that will skyrocket, we reviewed AI ETFs to compile a preliminary list of stocks and then selected the ones with the highest upside potential based on Wall Street analysts’ average price targets. We have also mentioned the hedge fund sentiment around each stock, as of Q4 2024.

Note: All data was recorded on April 21, 2025.

At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Alphabet Inc. (NASDAQ:GOOGL)

Upside Potential: 25.26%

Number of Hedge Fund Holders: 234

Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, operates through Google Services, Google Cloud, and other experimental ventures called “Other Bets.” The company focuses on making information universally accessible while supporting innovation through centralized AI research. Its powerful Gemini AI model enhances products like YouTube, Gmail, and Maps by understanding and combining text, images, and more. Google Cloud helps businesses leverage AI for growth. DeepMind, Alphabet’s AI arm, also made scientific breakthroughs like AlphaFold, which solved a long-standing protein-folding problem, showing Alphabet’s broad AI commitment.

Alphabet Inc. (NASDAQ:GOOGL) ‘s Q1 2025 results show strong growth across its business, driven by AI advancements. Google Cloud revenue reached $12.3 billion, up 28%, while YouTube ad revenue grew 10% to $8.9 billion. The company’s AI model, Gemini 2.5, is powering products like Search and Cloud, driving significant user engagement and developer adoption. Waymo is seeing rapid expansion, with 250,000 weekly paid trips. Alphabet is investing heavily in AI infrastructure, including its custom Ironwood TPU, and continues innovating with AI-powered tools and services. AI-powered ad campaigns improved performance in Q1, according to the company, with businesses using Alphabet’s DemandGen seeing a 26% increase in conversions per dollar spent.

Overall, GOOGL ranks 4th on our list of AI stocks that will skyrocket. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.