The stock looks like a smart portfolio addition, even though it has soared in recent months.
Alphabet‘s (GOOG -0.66%) (GOOGL -0.58%) ascent to becoming a $3 trillion behemoth has undoubtedly made many long-term investors rich in the past couple of decades. The gains aren’t letting up; shares have surged 45% just in the past three months (as of Sept. 26).
This top tech stock now trades at an all-time high. Here’s one reason why you should still buy Alphabet shares with $10,000 in 2025.
Image source: Alphabet.
Don’t overthink it
Investors shouldn’t overthink the situation. The market is presenting investors with the opportunity to buy one of the world’s elite businesses at a reasonable valuation. The stock currently trades at a forward price-to-earnings ratio of 23.3. For comparison’s sake, this is slightly more expensive than the S&P 500 index’smultiple of 21.8.
Alphabet’s best qualities
Alphabet is a high-quality company, so the premium to the overall market is more than justified.
It has a leadership position in the artificial intelligence (AI) race. Alphabet is involved in AI research, while also developing its own AI chips, operating a thriving cloud computing platform that serves AI tools and services, and running insanely popular AI-powered user-facing apps.
The business has a wide economic moat, underscored by network effects and its ability to collect and leverage data. And it’s incredibly profitable, posting a stellar operating margin of 32%in the second quarter (ended June 30).
Investors should seriously consider buying $10,000 worth of Alphabet stock in 2025. It should be a lucrative bet over the next five years.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.