Alphabet is emerging as a favoured pick for investors who want AI exposure with less risk, according to a Motley Fool analysis. Google Cloud revenue more than doubled in the third quarter, while the stock's worst day on record in October and its capital spending plans remain risks.
Google Cloud revenue more than doubled to $30.7 billion in the third quarter, helping Alphabet draw attention from investors seeking AI exposure. A Motley Fool analysis comparing Alphabet with cloud computing firm CoreWeave frames the Google parent as the lower-risk choice.
Three income streams support the case
The argument rests on the breadth of Alphabet's business. Google Search, YouTube and Google Cloud give the company several sources of income and a huge user base through which to sell AI products.
The third-quarter numbers back that up. Revenue rose 25% to $127.6 billion, and operating income climbed 30% to $40.6 billion.
CoreWeave carries more demand risk
CoreWeave, by contrast, is a pure AI infrastructure play and more exposed to swings in demand. Even so, its shares jumped 13% on Wednesday after a strong earnings beat.
Alphabet still faces risks
Alphabet's own risks remain, however. The stock suffered its worst day on record in October after the company posted $9.07 billion in negative free cash flow.
The company also plans $195 billion to $205 billion in capital spending this year.
Source: Coinpedia Fintech News
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