Correction or Not: This Artificial Intelligence (AI) Stock Is Worth Buying for the Long Haul

Core Viewpoint - Alphabet is positioned as a leading player in artificial intelligence (AI) and remains a strong investment choice for the long term, particularly due to its advancements in AI technology and its dominance in the online search and advertising market [1][9][10]. Company Overview - Alphabet's Google has maintained its status as an unbeatable force in online search and advertising, largely due to its long-standing commitment to AI [9]. - The company has integrated its Gemini large language model (LLM) into popular tools like Gmail and Google Docs, enhancing user experience and functionality [9]. Historical Context - Google revolutionized the search engine landscape in the late 1990s by providing a more intuitive search experience compared to older alternatives, which required complex query formulations [2][5]. - Over the past 25 years, Google has continuously improved its search engine and expanded its AI capabilities, making AI tools accessible to the general public [6]. Financial Performance - An investment of $1,000 in Google at its IPO in August 2004 would be worth over$63,700 by May 2025, showcasing significant long-term growth [11]. - Alphabet's current valuation ratios appear affordable compared to competitors like Microsoft and Nvidia, suggesting potential undervaluation [12]. Valuation Comparison - Alphabet's market capitalization stands at $1.95 trillion, with a price-to-earnings (P/E) ratio of 17.8, price-to-sales (P/S) ratio of 5.4, and price-to-free cash flow (P/FCF) ratio of 26.0 [12]. - In contrast, Microsoft and Nvidia have significantly higher P/E ratios of 34.6 and 44.4, respectively, indicating that Alphabet's stock could double and still compare favorably [12]. Investment Sentiment - The stock is currently trading 23% below its all-time highs from February, making it an attractive buy for investors [13].