Alphabet Inc: The Only Reason You Need to Be Bullish on Google Stock

Google StockGoogle Stock Gets a Boost from AI Software

Have you ever regretted not investing in Alphabet Inc (NASDAQ:GOOG) back when it was Google Inc? Do you ever wish you could turn back time just to cash in on Google stock’s meteoric rise to a gain of 1,045.35%?

If so, don’t worry. Google’s advertising business may have matured, but the company is still on track for massive growth. Its newest product, with its near limitless applications, has taken the roof off Google stock.

No idea what I’m talking about? Let’s start from the beginning…

Google became the most dominant search engine on the planet because it delivers the most relevant results. To “Google” something is so common that the Oxford English Dictionary even made it an official verb.

Yet most people have no clue why or how Google works so well. The more you use Google search, the better results it provides—but have you ever stopped to wonder why?

There’s no mystery to it really. Google simply developed software that learns. It gets smarter with each search and click. That’s what’s incredible. Google stock was basically the first major investment for artificial intelligence (AI) software.

We didn’t call it AI at the time, but that’s exactly what it is. Now that AI software has become a major draw for Silicon Valley investors, I expect to see many more AI stocks hitting the market.

What’s in it for Google? The company wants to power this entire AI revolution.

The company released an open-sourced platform for AI-powered app development. Any company can now harness the power of Google’s artificially intelligent software by going to www.tensorflow.com. All the tools are there.

Google launched the platform in November 2015, and it’s already a smash hit. Based on information from GitHub, it is currently the most popular platform among software developers. (Source: “Google Sprints Ahead in AI Building Blocks, Leaving Rivals Wary,” Bloomberg, July 21, 2016.)

What does that mean for investors? Google stock could skyrocket.

If software developers love the platform, they build apps for it—and more apps equals greater success. Just ask BlackBerry Ltd. The company didn’t make things easy for app developers, so its stock plummeted.

But here’s the most important thing: AI can be applied to almost every company in almost every industry. It is basically a way of making your business smarter and more efficient, so there’s no reason for any firm to avoid accepting the inevitable.

If you aren’t convinced, take a look at these two ways that Google is applying its AI software.

How Google Is Using AI to Boost GOOG Stock

1. Through IT Services

Google is already using AI-powered applications as bait. It’s the company’s way of luring new clients into the Google Cloud, which is still lagging behind Microsoft Corporation and Amazon.com, Inc.’s cloud computing solutions. Google is obviously hoping that companies will jump at the chance to use its AI products while also renting out the company’s servers. These are high-margin businesses, so I expect them to send Google stock soaring over the next 18 months. (Source: “Google Uses AI to Lure New Cloud Customers,” The Wall Street Journal, July 20, 2016.)

2. Catching Diseases Early

Healthcare is one of the most important applications for AI. For instance, Google has signed a partnership with the NHS Moorefields Eye Hospital in Britain that will hopefully aid in the early detection of eye degradation.

Google will feed one million anonymous eye scans through its software. The AI program will analyze the images to spot a pattern of how eye problems develop. Doctors will then use that information to try and identify and treat warnings signs before they cause too much damage. If these projects are successful, Google could draw in a ton of healthcare clients—and we all know healthcare companies pay top dollar. (Source: “Google’s DeepMind AI to use 1 million NHS eye scans to spot diseases earlier,” ArsTechnica, July 5, 2016.)

The Bottom Line on AI and Google Stock

The rise of AI-powered software is inevitable. In fact, I think the impact of artificial intelligence is big enough to create a fourth Industrial Revolution. Think about it: 200 years ago, we could plough a field or build houses with manual labor, but tractors and cranes made it much easier to do so. Much in the same way, AI will enhance the intelligence and efficiency of almost every business on the planet. It is the next big leap forward.

So, to circle back to my initial point, don’t stress over having missed Google stock’s first wave of growth—the next wave of growth is still to come.