<div id="readability-page-1">The massive amounts of capex swirling around the AI ecosystem have sparked worries that a bubble is in the offing. Alphabet (NASDAQ:GOOGL) has been one of the major spenders, and is guiding for a total of $91 to $93 billion in capex for 2025.<h3>Claim 70% Off TipRanks This Holiday Season</h3><ul><li>Unlock hedge-fund level data and powerful investing tools for smarter, sharper decisions </li><li> Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential</li></ul> While the spending is significant, Alphabet has the means to pay for it. The company's net income for the last quarter was just shy of $35 billion, giving it plenty of cushion to keep the spigots open. Though he acknowledges that the AI story is still in its early stages, investor Justin Pope believes that Alphabet is well-positioned to take full advantage of the changing landscape. In fact, he expects a firm demonstration of Alphabet's prowess in the coming year. &#34;Alphabet, not Nvidia, will be the world's largest company in 2026,&#34; declares the 5-star investor. Pope explains that Alphabet is much more than simply the &#34;world's most prominent internet company.&#34; Beyond YouTube, Google Chrome, and Google Workspace, the investor points out that Google Cloud is the third-largest cloud computing services platform. The company has also developed its own AI chips – TPUs – for use in its data centers. &#34;Alphabet owns a comprehensive AI ecosystem that gives it a significant competitive advantage over most other AI companies, which typically own only pieces of an ecosystem,&#34; adds Pope. Moreover, the company's legacy businesses are thriving, Pope points out. Google Services continues to generate substantial cash, with revenues from the recent quarter of $87.1 billion representing 14% year-over-year growth. That allows Alphabet to fund its AI investments through profits rather than debt, notes Pope. When it comes to GOOGL's valuation, the investor argues that its price-to-earnings ratio of 29x is perfectly &#34;reasonable&#34; for a company that is delivering earnings growth in the high teens. In other words, the coming year could be a good one indeed for GOOGL. &#34;That leaves room for the stock to continue higher through 2026 if Alphabet's businesses continue to perform well,&#34; concludes Pope. (To watch Justin Pope's track record, click here) By and large, Wall Street agrees. With 28 Buys and 7 Holds, GOOGL enjoys a Moderate Buy consensus rating. Its 12-month average price target of $326.41 would translate into only minimal upside, however, meaning that much of the implied optimism has already been achieved. (See GOOGL stock forecast)</div>

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Investor Justin Pope believes Alphabet (NASDAQ:GOOGL) is well-positioned to dominate the AI landscape, expecting it to become the world's largest company by 2026. Alphabet's significant capex in AI, strong net income, and thriving legacy businesses support this outlook. Pope highlights Alphabet's comprehensive AI ecosystem and reasonable valuation, suggesting potential for stock growth. Wall Street largely agrees, with a Moderate Buy consensus rating and a 12-month average price target of $326.41.

- Concerns about a potential bubble have arisen as significant capital expenditure, notably $91 to $93 billion by Alphabet in 2025, surges in the AI ecosystem.  
- Despite the high spending, Alphabet's strong net income nearing $35 billion provides a buffer, allowing continued investment in AI while maintaining healthy profit levels.  
- Analyst Justin Pope asserts that Alphabet's diverse ecosystem and thriving legacy businesses position it to excel in the evolving AI landscape, with Wall Street's consensus rating indicating a Moderate Buy for GOOGL.

'The Biggest and the Baddest,' Says Investor About Alphabet Stock