Alphabet’s AI image generator is trending, boosting growth in YouTube and Google Cloud services. Stock remains affordable under $250 with a low P/E ratio. Shares of Alphabet (NASDAQ: GOOG, GOOGL) are up 31% in 2025, outperforming Microsoft and trailing Nvidia. Investors are optimistic about new AI innovations catching up to OpenAI’s ChatGPT.

Gemini, Alphabet’s chatbot, is gaining ground with a new AI image generator attracting millions of users. While revenue impact is not immediate, viral usage of Gemini could lead to increased subscriptions and ad revenue over time, helping Alphabet regain market share from competitors like OpenAI.

Besides Google and Gemini, Alphabet owns YouTube, Google Cloud, Android, and Waymo. YouTube generated $10 billion in ad revenue, while Google Cloud saw 32% revenue growth last quarter with $54.4 billion in annual recurring revenue. Google Cloud’s profit potential is significant, with operating income reaching $2.8 billion last quarter.

At under $250, Alphabet stock trades at a market cap of $3 trillion with a P/E ratio of 26.5, lower than peers like Microsoft and Nvidia. With steady growth in Google Search, explosive growth in Google Cloud, and high engagement with Gemini, Alphabet stock appears undervalued. Consider holding for long-term growth potential.

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Read more at Nasdaq: Is Alphabet Stock Still a Buy Below $250?