Alphabet stock (NASDAQ:GOOGL) is one of Harvard University’s top AI stock picks. On March 13, analysts at Needham reiterated that heightened generative artificial intelligence investments represent Alphabet’s (NASDAQ:GOOGL) highest return on invested capital, measured by free cash flow.
The research firm expects the tech giant to self-fund its capital expenditures between 2025 and 2028, thanks to its solid free cash flow. Consequently, Needham has reiterated a Buy rating on Alphabet stock with a $400 price target.
According to the research firm, the tech giant is well-positioned to generate significant free cash flows if generative AI proves non-disruptive. Generative AI execution risks at the tech giant are the lowest among hyperscalers since it has proved it can transition its lucrative search link business to AI answers and overviews.
The remarks come on Google completing the acquisition of the cloud and artificial intelligence security platform Wiz. It plans to integrate it with Google Cloud while retaining its brand and serving customers across all major cloud providers.
Alphabet stock (NASDAQ:GOOGL) is a dominant leader in artificial intelligence, leveraging a full-stack approach spanning hardware infrastructure, foundational research, and widespread consumer/enterprise applications. Through its subsidiary Google, Alphabet embeds AI into its core products, including Search, YouTube, Android, and Cloud, while driving cutting-edge research through its DeepMind division.
While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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