<div id="readability-page-1">In 2023 and 2024, Wall Street left Google parent Alphabet (GOOG -0.04%) (GOOGL -0.16%) for dead (figuratively). The company was supposedly going to be disrupted by the new artificial intelligence (AI) chatbot called ChatGPT, which now has 700 million weekly and 190 million daily active users. Since then, Alphabet has gotten back on its feet. Revenue growth for Google Search hasn't skipped a beat, with the stock generating a return of 29% for shareholders year to date. Now, the company is pressing even harder on the accelerator pedal to compete with ChatGPT -- made by OpenAI -- as new tools are added to its Gemini AI. One that has gone viral is its imaging editing software called Nano Banana. As of this writing, Gemini is the most popular free app in the Apple App Store (based on downloads). Does that mean Alphabet just (figuratively) killed OpenAI by becoming the best AI stock to own today? <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzU5NzgvYWktNS5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzU5NzgvYWktNS5qcGcmdz03MDA"/>Image source: Getty Images. </div> <h2>Alphabet now has its own viral imaging service</h2> In late August, Alphabet began rolling out its new image editor for Google Gemini users on a selective basis. The imaging tool is a leap in capabilities from anything else out there today, allowing users to easily create new scenes with themselves, combine characters from images, or imagine completely new scenes. Its lifelike capabilities have driven viral usage of the product, with users making hundreds of millions of images already. The program's popularity has driven a huge boost in downloads for the Gemini mobile application. It recently surpassed ChatGPT to become the No. 1 downloaded application on Apple's App Store for several weeks (although it fell to No. 2 this week, behind a new video editing app from OpenAI called Sora). On Sept. 8, Alphabet announced that 23 million new users had already tried Gemini due to the Nano Banana imaging service. ChatGPT has significantly more users than Gemini: 190 million daily users compared to 35 million for Gemini as of the latest company updates. Now, it looks like Gemini may be gaining on OpenAI's flagship mobile application, and quickly. This doesn't mean that OpenAI or its ChatGPT app is dead. ChatGPT is now the third-most popular app on the App Store, and OpenAI's video-editing app is the new No. 1. But this may now be a three-horse race in consumer AI tools instead of a winner-takes-all scenario. This leapfrog in downloads has investors more excited about Alphabet stock. The company recently eclipsed a market cap of $3 trillion (it is currently worth $2.97 trillion), making it one of four stocks in history to surpass that valuation milestone. <h2>Alphabet is more than just Gemini</h2> It is nice to see Alphabet start to win in AI, which should be a relief for shareholders. But the company is more than just viral Gemini tools. Google Search revenue grew to over $50 billion last quarter. YouTube advertising does close to $10 billion in revenue every quarter. Google Cloud is growing like gangbusters and recently surpassed $50 billion in annual recurring revenue (ARR). The cloud may be the secret gem that drives Alphabet's growth over the next few years. It is growing revenue 32% year over year, and management still believes it is way behind the curve in getting data center capacity up for its clients. As the company budgets more for capital expenditures, that will lead to more revenue growth over the next three years. Plus, the segment is now doing $2.8 billion in quarterly operating income with margins of over 20%. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b959712b4ed578b27fd535b29f01f564.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="441" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b959712b4ed578b27fd535b29f01f564.png"/> Data by YCharts; PE = price to earnings. <h2>Is Alphabet the best AI stock to buy?</h2> Alphabet is firing on all cylinders today. Gemini is going viral, while the company's moneymakers are posting consistent growth. Management is consistently returning cash to shareholders through buybacks and dividends. The company just started paying a dividend that yields 0.33%, while buybacks have brought the number of shares outstanding down 11% in the last five years. But is the stock cheap after surpassing a $3 trillion valuation? I still think it is. Alphabet has a price-to-earnings ratio (P/E) of 26 as of this writing, which is cheaper than most other &#34;Magnificent Seven&#34; stocks. With everything the company has going for it in the age of AI, combined with its capital returns program, the stock still looks like a good bet for investors for the rest of this decade. </div>

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In 2023 and 2024, Alphabet (GOOG, GOOGL) rebounded from initial setbacks against ChatGPT, achieving a 29% stock return year-to-date. Its Gemini AI, particularly the viral imaging tool Nano Banana, has gained significant traction, surpassing ChatGPT in downloads for a period. Alphabet's market cap recently exceeded $3 trillion, bolstered by strong revenue from Google Search, YouTube, and Google Cloud. With a P/E ratio of 26, Alphabet is considered a strong investment in the AI sector, supported by consistent cash returns to shareholders through dividends and buybacks.

- In 2023 and 2024, Alphabet rebounded from initial concerns about competition from ChatGPT, achieving a 29% stock return year to date.  
- The launch of its Gemini AI, particularly the viral imaging tool Nano Banana, has significantly boosted user engagement and downloads, surpassing ChatGPT in the App Store for a period.  
- Alphabet's diverse revenue streams, including Google Search and Cloud, alongside a favorable price-to-earnings ratio, position it as a strong investment in the AI sector.

Did Google Just Kill OpenAI and Become the Best AI Stock to Own Today?