It’s probably not surprising that artificial intelligence companies are feeling a little stress right now. Every industry goes through its ups and downs. That’s why it’s important to invest with the long term in mind.
AI companies are under fire right now because there’s concern that spending is outpacing the industry. There are memory shortages, capacity issues, and some political pushback that is getting new attention in the wake of the U.S. midterm elections. Add <a href="https://www.fool.com/investing/2026/11/12/scandal-forces-jensen-huang-out-at-nvidia-here-s-how-investors-should-consider-nvidia-stock-now/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=db38a26a-6a04-4d35-a706-c7c7e57d82b6″ rel=”nofollow noopener” target=”_blank”>Jensen Huang’s scandal that triggered his resignation as CEO of Nvidia — by all accounts, the top AI company — and you’ve got a perfect storm that is hurting the AI industry now.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger.Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.Continue »
But here’s the rub: AI is here to stay. Nothing that has happened in the last few weeks will cause the technology to wither and die; in fact, it’s just going to grow stronger as more companies figure out how to use it well. So, I believe a smart way to invest in AI right now is to find a company that doesn’t need everything to go right. Because it’s got its fingers in many different AI pies — and it’s making money from several of them already.
I’m talking about Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG).
Google Cloud is growing at an incredible pace
Alphabet’s third-quarter results demonstrate just how much demand there is for its AI products. Revenue was $127.6 billion, up 25% from a year ago. Google Cloud revenue, which represents Alphabet’s powerful cloud computing business, more than doubled to $30.7 billion. Cloud operating income was $11.1 billion, compared with $3.6 billion a year earlier.
Much of that growth came from customers buying AI computing infrastructure and services. Google Cloud posted a $561 billion backlog, so the company is assured that profits will continue to roll in.
It would be fine if Alphabet were simply renting computing capacity. But it’s doing a lot more. Its custom tensor processing units, or TPUs, were originally developed to support Google’s AI workloads, but Alphabet is now selling TPU systems to outside customers. Management believes TPU sales will grow next year, giving Alphabet another way to profit from AI.
AI is helping Google’s biggest business
Alphabet’s most recognizable business is its Google search engine, which has more than a 90% global market share. Google Search has become increasingly important to Alphabet’s bottom line, and it’s using AI to help out there, as well.
