Daily Wealth

Sergey Brin didn't plan to return to work...

After stepping down from his executive role at Alphabet (GOOGL) in 2019, Brin faded into billionaire obscurity. He busied himself with charity, venture capitalism, and windsurfing...

But in late 2022, everything changed...

That fall, OpenAI launched ChatGPT. Overnight, Silicon Valley's favorite search engine looked like a dinosaur. Alphabet CEO Sundar Pichai even called it a "code red" emergency...

And just like that, Brin came back to head up Alphabet's AI overhaul.

Brin recently reported that he's at the company "pretty much every day now," leading the charge to perfect new AI products.

And for the first time in years, Alphabet is quietly winning the AI arms race. But Wall Street isn't awake to that reality just yet.

Let me explain...

For many investors, Alphabet's AI efforts began and ended on February 6, 2023, with the disastrous debut of Bard...

Bard was the company's first salvo in the fight against ChatGPT. But as I wrote in May 2023, the market didn't care...

Google tweeted out a video of its own chatbot named Bard... [But] in the video, Bard gave false information to one of its trial users.

The market was quick to punish the error. Alphabet lost 7% of its market cap in one day.

Bard flopped... costing Alphabet billions.

Wall Street Is Missing Alphabet's AI Leap

This early gaffe still looms large in investors' memories. But Alphabet has transformed into an innovative AI platform since then. Just look at the tech giant's development pipeline in the past year...

The company has relentlessly built its AI product suite over the past 12 months. And today, it's hard to find better value than Alphabet's chatbots.

To see this, we compared Google Gemini 2.5 Pro large-language model with OpenAI's o3 model. (These names can get confusing, so just remember that both are "advanced reasoning" chatbots.)

A great measurement of a chatbot's value is the Intelligence vs. Price index on ArtificialAnalysis.ai.

This index plots an AI model's price against its score on the Artificial Analysis Intelligence Index – in essence, a chatbot IQ test. Take a look at how Gemini 2.5 Pro and o3 stack up...

The data is clear. Gemini 2.5 Pro outthinks o3... at a fraction of the price.

Despite all this, Wall Street still views Alphabet as a rusty, old search engine whose future is in doubt. We can see this using Alphabet's price-to-earnings (P/E) ratio...

This measure tells us how much investors are willing to pay per dollar of a company's earnings. The lower the P/E ratio, the cheaper the company's valuation...

And today, Alphabet sits near its lowest P/E ratio in a decade. Take a look...

Right now, Alphabet trades at a P/E ratio of about 19...

The only time in the past decade that Alphabet had a cheaper P/E ratio was from late 2022 to early 2023... when ChatGPT first hit the scene.

In other words, Alphabet has quietly pulled ahead in AI... while investors are still stuck relitigating Bard.

This is the kind of perception gap we dream about...

Alphabet is a world-class business, building cutting-edge tech. And it's being mispriced because of a single early misstep.

Don't miss this chance to own this future AI dominator on the cheap. Buy Alphabet shares now, before the rest of the market wakes up.

Good investing,

Sean Michael Cummings

Wall Street Is Missing Alphabet's AI Leap

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