Artificial intelligence (AI) has the potential to be the most transformative technology in history. But some believe that quantum computing will be even bigger than AI. Self-driving ride-hailing services, commonly known as “robotaxis,” have the potential to bring about a new seismic shift in society.
Investing in any of these hot areas could yield significant returns over the next decade. But you don’t necessarily have to buy multiple stocks. Introducing one “Magnificent Seven” stock that has it all.
check all boxes
Google’s parent alphabet (GOOG -1.14%) (Google -0.98%) has been a pioneer in AI for many years. Its researchers developed transformers (the “T” in ChatGPT) that paved the way for today’s large-scale language models (LLMs).
The company remains one of the top leaders in AI. Google Gemini ranks as one of the most powerful AI models. Google Cloud provides customers with a wide range of AI tools. Google Search, YouTube, and Alphabet’s other products use AI extensively.
While classical computers use bits (0 or 1), quantum computers use quantum bits (qubits) that can be 0, 1, or both at the same time. They can also “entangle” with other qubits that are far away. These properties could allow quantum computers to process more information much faster than classical computers. Google’s recently announced new Willow chip could be a major breakthrough in the development of useful large-scale quantum computers.
Alphabet’s Waymo division is leading the way in offering robotaxi services. Waymo already offers self-driving ride-hailing services in Los Angeles, Phoenix, and San Francisco. It plans to expand to Austin, Atlanta, and Miami soon.
To be sure, Waymo’s service has had some highly publicized glitches, including an incident where a robotaxi repeatedly drove in circles in a parking lot. However, self-driving technology is usually reliable and continues to improve. Investors shouldn’t rule out Waymo’s potential to become Alphabet’s primary growth driver in the coming years.
better than anyone else
AI should be a significant tailwind for all stocks in the Magnificent Seven. Some of them could also be winners in quantum computing, especially Amazon, Microsoft, and Nvidia. Amazon, Nvidia, and Tesla are focusing on the robotaxis market in different ways.
But no other member of the Magnificent Seven could be the leader in all of these technologies like Alphabet. The company also outperforms its peers in other important ways.
If cash is king, then the alphabet sits on the throne. The tech giant’s $93.2 billion in cash, cash equivalents, and short-term investments is larger than the cash reserves of any other Magnificent Seven company. Alphabet is well-positioned to continue investing in research and development in AI, quantum computing, and robotaxis.
The company’s stock is also one of the cheapest among the Magnificent Seven based on its growth prospects. Only Nvidia has a lower price-to-earnings (PEG) multiple than Alphabet’s PEG multiple of 1.27.
Two things to note
Investors need to keep an eye on two things that could hurt Alphabet. First, a federal judge ruled in August 2024 that Google violated antitrust laws by creating an illegal monopoly in the search engine market. Google is also embroiled in antitrust litigation related to its digital advertising practices. Second, some believe that generative AI poses a major (perhaps existential) threat to Google Search.
However, Google is appealing the decision regarding its alleged search monopoly. Some legal experts believe the company’s case is strong and are hoping for relatively narrow remedies rather than major changes that would hurt its business.
When it comes to generative AI threats, Google Search already includes genAI in its AI overview. Google’s advertising revenue from search continues to grow. Alphabet and Google CEO Sundar Pichai said during the company’s third-quarter earnings call that the new features are improving search usage and user satisfaction. He added: “Advertising integration within AI Overviews is also strong, helping people connect with businesses when they search.”
Perhaps these issues could become even bigger problems for Alphabet, but I’m optimistic they won’t. I think Alphabet’s leadership in AI, quantum computing, and robotaxis makes it one of the best Magnificent Seven stocks to buy right now.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Keith Speights has held positions at Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
