Alphabet’s Search business is thriving, thanks to Gemini 3, driving higher user engagement and smarter responses to queries. Despite higher spending on data center infrastructure impacting earnings growth, Search revenue grew 17% to $63 billion. AI is a key growth engine for Alphabet, accounting for over 55% of total revenue.

Investors are taking notice of Alphabet’s success in profiting from AI, with its stock soaring. The launch of Gemini 3 has doubled the number of queries per user in AI Mode. Longer, more conversational searches are leading to increased user engagement and ad revenue opportunities.

While data center investments may pressure near-term profitability, they contribute to improved AI and user experiences. Alphabet’s momentum in its core business makes it an appealing investment, trading at 28 times forward earnings estimates.

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Read more at Nasdaq: 1 Reason to Buy Alphabet Stock Hand Over Fist