Alphabet has dominates the internet search industry with a 90% market share.

Alphabet is the parent company of Google, YouTube, Waymo, and DeepMind. Google Search currently dominates the internet search industry with a 90% market share, but there have been concerns about AI applications like ChatGPT eroding its advantage. Simply put, chatbots offer a more convenient way to access information compared to traditional search, which requires the user to sift through web pages for answers.

Alphabet responded to that threat by launching a series of AI chatbots of its own, culminating in the new Gemini models. Plus, the traditional Google Search experience now uses generative AI to provide users with text-based answers to their queries at the top of the page, saving them from visiting third-party web pages.

Those two initiatives should protect the platform's dominance, and there was evidence of that in the first quarter of 2024. Revenue generated from Google Search increased by 14.3% compared to the year-ago period, marking the fastest growth rate in almost two years.

Plus, Alphabet now offers Gemini to existing Google Workspace subscribers for an additional fee, where they can integrate it with Gmail, Google Docs, Google Sheets, and more to help users boost their productivity with AI. It's similar to the way Microsoft is offering Copilot for 365, and it effectively creates a new recurring revenue stream for Alphabet.

Alphabet stock trades at a P/E ratio of about 27.5 right now, so not only is it much cheaper than Nvidia, Microsoft, and Apple, but it's also cheaper than the Nasdaq-100 index. If Cathie Wood is right about AI software, Alphabet stock looks like an absolute bargain right now compared to Nvidia.