Alphabet (NASDAQ:GOOG NASDAQ:GOOGL) has been the worst-performing Magnificent 7 stock in the past year. This sort of underperformance is quite unprecedented, considering Google has been doing quite well financially. In Q1, revenue grew 12% year-over-year, and the company beat estimates on both the top line and the bottom line.

Most of the fear is due to the perception that Google is losing the AI race, thereby losing its search engine market share and ending up like Yahoo in the long run.

However, this is very unlikely to be the case if you look at Google’s AI achievements, which have been flying under the radar. If anything, Google seems to be leading in the AI race, and it might be a good idea to buy GOOG stock before other investors realize it.

Google’s AI Breakthroughs Can’t Be Matched
The first and second places on the Chatbot Arena LLM Leaderboard are both Google’s AI models at the moment. These AI models come with a one-million-token context, whereas competitors cap out at around 250,000. These models are far cheaper.

You may have also heard of VEO 3, which can now create highly realistic videos with audio. Google has several other ongoing AI projects, targeting real-world use cases. Project Mariner allows the AI to take control of your browser and do tasks for you, and Project Astra is aimed at building a “universal AI agent.”

All of these ongoing AI projects put Google far ahead of everyone else. Google also added AI mode to its search engine recently, and this should stop “AI wrappers” from stealing market share.

GOOG Stock Is a Solid Buy
Previous fears about Google being dethroned by AI haven’t materialized, even when Google didn’t have an alternative to offer. Now that Google is clearly ahead of everyone else, GOOG stock looks far more attractive.

GOOG stock is down 19.2% from its highs and is trading at just 18.6 times earnings. Historically, investors have paid 28.6 times earnings for the stock. I’d buy the dip and hold for the long term.

— Omor IE

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Source: Money Morning