Not Anthropic. Not OpenAI. This Is the Artificial Intelligence (AI) Stock I'd Buy Before the Next Mega-IPO.
Anthropic and OpenAI are rumored to be approaching IPOs later this year or early next year.
The artificial intelligence (AI) revolution has introduced two of the fastest-growing start-ups: OpenAI with ChatGPT and Anthropic with Claude models. Both companies have experienced extraordinary growth, with OpenAI reaching a valuation of $852 billion and Anthropic at $965 billion after recent funding rounds. Investors are keen to buy shares of these companies when they go public.
Alphabet (GOOGL +1.05%) (GOOG +0.96%), known for its Google Cloud services, could be a compelling alternative to waiting for these AI giants to IPO. Google Cloud provides AI compute infrastructure to both OpenAI and Anthropic, creating a mutually beneficial relationship. Alphabet's investment in Anthropic, valued at $3 billion, could be worth $280 billion if Anthropic's IPO valuation reaches $2 trillion.
Additionally, Google Cloud revenue surged 82% year-over-year in Q2, driven in part by OpenAI and Anthropic's infrastructure commitments. While OpenAI and Anthropic could become highly-valued public companies, Alphabet offers a more stable and profitable investment opportunity, with robust revenue and operating income. For investors seeking exposure to the AI boom, Alphabet presents a compelling alternative to directly purchasing shares in OpenAI or Anthropic.
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