"With 15 products that each serve half a billion people, and six that serve over 2 billion each, we have so many opportunities to deliver on our mission," CEO Sundar Pichai said in Alphabet's (GOOGL -0.30%) (GOOG -0.32%) second-quarter 2023 press release. There aren't many businesses out there, if any, that have the reach and adoption that this one does.

Alphabet has provided a huge boost to investor portfolios since its initial public offering in 2004. This tech titan is a powerful enterprise these days, but it's not even close to reaching its potential, as growth is still a key part of the story. That introduces more upside for patient investors.

If you buy $10,000 in Alphabet stock in 2025, will you become a millionaire in 10 years?

Image source: Alphabet.

Alphabet's impressive second quarter

The momentum continues for Alphabet, which exceeded Wall Street expectations on both the top and bottom lines. Revenue jumped 13.8% year over year to $96.4 billion. Diluted earnings per share (EPS) soared 22.2% to $2.31.

Performance was superb across the board. Google Search revenue was up 11.8%, while YouTube ad sales grew 12.6%.

Google Cloud was a standout. Its sales surged 31.7%, faster than its rate in the first quarter. And the segment posted a 20.7% operating margin, as it starts to see benefits from scaling up.

Betting big on AI

Alphabet is wildly profitable. In 2024, it produced $100.1 billion in net income. Through the first six months of this year, net income totaled $62.7 billion. And as of June 30, its balance sheet had $95.1 billion in cash, cash equivalents, and marketable securities.

As a result, the company has the financial resources to go all-in on artificial intelligence (AI). Management now plans $85 billion in capital expenditures (capex) this year to expand technical infrastructure. That's up from a prior outlook of $75 billion.

Investors should think about this monster level of spending from multiple angles. On the one hand, it might be table stakes to maintain Alphabet's powerful competitive position in its various verticals. If its peers are spending huge amounts of money, it should as well. If it doesn't, there's a risk the business will fall behind in the AI race.

What's more, it already has so many popular services that it can clearly see how AI can benefit its ability to serve users and customers. And if there's so much demand for AI tools and services within Google Cloud, the business has no choice but to continue bolstering its offerings. "We are seeing significant demand for our comprehensive AI product portfolio," Pichai said about Google Cloud's success in the second-quarter earnings call.

But it's easy to be critical, too. Allotting $85 billion for capex this year, which would be 61.9% higher than last year's already lofty $52.5 billion, could be a reason to worry. No one has any clue what the ultimate payoff will be from these investments. If AI doesn't end up being the game-changing tech breakthrough many think it will be, then these cash outlays will prove to be wasteful.

Buy the stock, but set realistic expectations

Alphabet is in a position to continue its double-digit revenue and EPS growth for the foreseeable future. It's already a leader in AI, and with the amount of capital it's deploying, it's ready to dominate what could be the next technological revolution.

However, it's totally unrealistic to expect a 100-fold gain in 10 years; this is a huge enterprise already. In fact, investors shouldn't look for companies that can put up that kind of gain, which is almost impossible.

Investors should still consider buying the stock, though, which trades at a compelling forward price-to-earnings ratio of 19.9. It could beat the market over the next decade.