Cathie Wood goes on a budget search, recently acquiring a low-cost Artificial Intelligence (AI) stock with immense prospective value.

Cathie Wood goes on a budget search, recently acquiring a low-cost Artificial Intelligence (AI) stock with immense prospective value.

In a recent financial report, tech giant Alphabet has announced its Q2 2023 results, showcasing continued growth in its core businesses and strategic partnerships.

Alphabet's largest revenue source, advertising, generated $71.3 billion, marking a 10% year-over-year increase. This growth is particularly impressive given the competitive landscape, as the company continues to strike lucrative deals with rivals.

Notably, ARK Invest, the innovative investment firm led by Cathie Wood, has increased its position in Alphabet. This move was made in late July, as part of a broader strategy that also includes high-flying growth stocks like Palantir Technologies, CrowdStrike, and CoreWeave in the AI sector.

In addition to this, ARK Invest has also acquired shares of Brera Holdings PLC in July 2022. This investment, totalling $162 million, was made across the ARK Next Generation Internet ETF, ARK Innovation ETF (ARKK), and Ark Fintech Innovation ETF (ARKF).

Cathie Wood has identified Alphabet as a cheap stock among major AI players, a viewpoint that seems to be gaining traction among investors. Alphabet's stock currently boasts a lower price-to-earnings (P/E) ratio compared to many of its big tech peers.

The company's stock has also attracted the attention of Wall Street, with investors focusing on Alphabet's profit margin profile. Despite concerns about the rise of ChatGPT and other large language models, accelerating growth between Google Search and YouTube suggests advertisers still see a high return on investment.

In terms of partnerships, Google Cloud has recently attracted OpenAI, a perceived rival, as one of its new major partners. This partnership is largely due to Google Cloud's advanced AI data centers.

Moreover, Alphabet is positioning itself for significant valuation expansion in the coming years. One of its strategic moves in this direction is the development of its own quantum computing operation through the development of custom chipsets, called Willow.

Cathie Wood's investment strategy encompasses both emerging businesses and well-established blue chip opportunities. This strategic approach reflects her confidence in Alphabet's long-term potential.

In the face of aggressive investments, Alphabet has managed to maintain its profit margin profile. Google Services, for instance, reported a 12% year-over-year growth to $82.5 billion in Q2 2023, with its operating margin remaining flat year over year at 40%.

The bearish narrative about Alphabet stock appears to be fully baked into its current price. As such, many investors view Google's stock as a no-brainer buying opportunity for long-term investors at its current price point.

Alphabet's Q2 2023 results underscore its resilience and strategic foresight in the rapidly evolving tech landscape. With its continued growth, strategic partnerships, and innovative initiatives, Alphabet is poised to remain a key player in the tech industry.

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