One of the largest tech companies in the world, Alphabet (NASDAQ:GOOG) stock is a noted Magnificent 7 play that remains a core piece of many long-term growth investor portfolios. This search and cloud giant consistently generates strong profits, supporting its rising share price.
Questions around Alphabet’s viability as a growth holding have built, as the company’s revenue growth rate has slowed in recent years. Of course, as companies like Alphabet become giants in their respective industries, growth rates are typically slow.
However, a resurgence of interest from growth-oriented investors in Alphabet stock is building as the YouTube and Google parent integrates artificial intelligence technology into its offerings.
The thinking is that Alphabet will accelerate its top- and bottom-line growth profile, and become much more efficient overall.
That’s a story I think is easy for investors to understand, and price in. It should be no surprise to anyone that Alphabet stock is up roughly 25% year-to-date.
Let’s dive into whether this growth story can continue.
Alphabet Stock and the Malaysian Investment
Alphabet recently announced a $2 billion investment in Malaysia, marking its first data center and Google Cloud hub in the region. This move follows Microsoft’s commitment to invest $2.2 billion in Malaysia’s cloud and AI infrastructure.
Prime Minister Anwar Ibrahim sees Google’s investment as a vote of confidence in Malaysia’s governance and economy, projecting a $3.2 billion economic boost and 26,500 jobs by 2030.
These announced plans for new hubs in Malaysia’s Selangor state emphasize Alphabet’s ambitions in growing its global cloud services and AI education businesses.
Malaysia will become the 12th country with a Google data center, extending services to enterprises, startups, and the public sector.
While Alphabet may cut jobs at home, expanding operations globally could prove to be a very lucrative move for the tech giant.
Solid on Google Services Segment
Benefiting from robust momentum in its Google Services segment driven by search, YouTube, and Android, Alphabet continues to enhance this segment.
A notable effort is Google’s introduction of “Minimized Custom Tabs” for Google Chrome on Android, facilitating multitasking and smooth transitions between native apps and web content.
The introduction of custom tabs is poised to enhance Chrome’s functionality, likely driving increased web browsing traffic for Alphabet.
Alphabet’s move is anticipated to resonate well with Android users. Chrome 121 also saw the integration of generative AI features like “Tab Organizer” and a theme maker, providing users with convenient tab grouping and custom theme creation options.
Alphabet introduced a Gemini shortcut in Google Chrome’s address bar for quicker access to bookmarks, history, and tabs. Additionally, an Incognito mode was rolled out, enabling anonymous browsing with browsing history and tracking data erased upon browser closure.
Google is developing a “Listen to this page” text-to-speech feature for Chrome on Android, offering users a convenient option accessible through the three-dot overflow menu.
The Verdict on GOOG Stock
It’s my view that Alphabet remains among one of the best value picks within the magnificent 7 group. The company’s multiple of 26-times earnings is reasonable, relative to expectations around its growth rate accelerating moving forward.
I think the company’s continued innovation within the world of AI, and its dominant position in search and strong and growing market share for eyeballs in YouTube, remains a key reason to hold this stock long term.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.