Alphabet’s shares have surged 66% this year, driven by strong AI technology and business growth. Revenue topped $100 billion for the first time, with double-digit growth in search advertising, YouTube, and Google Cloud. Investors must now consider valuation risk as the stock price continues to climb.

Alphabet’s third-quarter revenue rose 16% to $102.3 billion, with Google Cloud revenue up 34% to $15.2 billion. The company’s AI investments are paying off, with substantial growth and profitability. CEO Sundar Pichai highlighted the importance of AI in driving momentum and innovation across the company’s services.

With a 66% increase in stock price, Alphabet’s P/E ratio of 31 suggests a possible overvaluation. The company’s fundamentals have improved, but risks remain if AI costs don’t lead to sufficient profit growth. While the stock isn’t necessarily overvalued, caution is advised for investors looking to capitalize on AI exposure.

Read more at Nasdaq: Alphabet Stock Has Soared This Year. Is It Still a Buy?