The artificial intelligence (AI) boom is showing no signs of letting up. Executive teams want to leverage this technology, while employees are worried about how it could affect their jobs. And then there are investors that continue to look for ways to profit from this trend.

Picking the right business could be a boon for your portfolio. If you have $3,000 ready to invest right now, here’s one AI stock to buy and hold for the long term.

Image source: Getty Images.

At the forefront of AI

“We will move from mobile-first to an AI-first world,” CEO Sundar Pichai of Alphabet‘s (GOOGL 3.24%) (GOOG 3.02%) then-Google division said in the company’s 2015 letter to shareholders. This was to outline a fresh strategic focus and outlook of the tech landscape. Looking back with the benefit of hindsight, it’s quite remarkable how prescient this perspective was.

If we go even further back, Google was using machine learning capabilities in 2001 to help users with their spelling within its popular search engine. While everyone else seems to finally be coming around to the AI craze, Alphabet has been working on this technology for quite some time.

This has become more notable recently, with different platforms leveraging AI to better serve users. For example, Search allows users to conduct queries with their cameras, Maps uses AI to provide traffic info, and YouTube can come up with captions for content creators. These are clear examples of AI helping improve the user experience.

At its developer conference in May, one notable update that Alphabet announced was Agent Mode. Soon to be released, this tool can handle complex, multistep tasks from start to finish by conducting different activities like surfing the web or doing deep research.

Waymo, Alphabet’s autonomous vehicle (AV) and robotaxi unit, also leans heavily on AI when completing rides and ensuring a safe trip. It’s also used for training and advancing the AV tech.

Perhaps no segment has a greater opportunity in AI than Google Cloud. Cloud computing is a major growth market, as more IT spending shifts from on-site to off-premises. This has provided a tailwind. However, now that more companies are realizing that they must incorporate AI within their own operations, it makes Google Cloud even more critical as a vendor.

During the first quarter of 2025, 74% of Alphabet’s revenue, or $67 billion, came from digital advertising efforts. AI is helping these important customers by building automated ad campaigns in a budget-friendly way, for example.

Alphabet is undoubtedly all-in on the AI transition. It’s working on this technology to not only improve its existing products and services, but to create entirely new tools for users and customers to benefit from. That strategic focus positions it well for the future.

Other reasons to buy this AI stock

Based on these factors, it’s understandable if you’re starting to think that Alphabet might be the best AI stock to own. However, there are other reasons to appreciate this business and opportunity.

Alphabet is in incredible financial shape. Even after sizable capital expenditures of $53 billion were made in 2024, the company still managed to bring in $73 billion in free cash flow. It generates unbelievable earnings that allow it to keep plowing more money into things like servers and data centers. Critics will say that this is wasteful spending, but it’s a risk worth taking to ensure the business stays ahead of the curve.

The current valuation is also too hard to ignore. As of this writing, shares are trading at a forward price-to-earnings ratio of 17.5. This multiple represents a 22% discount to the overall S&P 500. All this means investing $3,000 in the stock today and holding for the long term is a smart move.