Shares of Alphabet (GOOG 4.60%) (GOOGL 4.62%) have finally come to life on Wednesday after the company's I/O presentation yesterday. Alphabet announced numerous new AI products and advances that show Google is leading in artificial intelligence (AI), not falling behind.

After years of worrying about AI disrupting the Google cash cow, the market has turned optimistic, and shares are up 5.5% for the day at 11:30 a.m. ET.

Alphabet's AI play

Google held its I/O event yesterday and introduced a number of product enhancements like AI-mode in search, Android XR, and agent mode in the Gemini app. The company is leaning into its technology and infrastructure advantages to bear in more ways for both users and developers on Google Cloud.

Google is bringing all of its products to AI. Image source: Alphabet.

What's most impressive is the breadth of advances in AI, from language to video. And the company is trying to push AI into its existing products like Search and Gemini, presumably before the search business is disrupted by ChatGPT and Perplexity.

While the announcements weren't financial in nature, they showed how quickly Alphabet is building product platforms that could drive financial results in the near future. Google Cloud is a growth driver today, AI in search could allow search to grow rather than be disrupted, and the expansion of Android into glasses could be another growth platform.

Alphabet's stock is too cheap to pass up

What the market has been worried about for years is Google Search being disrupted by AI competitors. This is another data point that shows Google is innovating in AI and may be more likely to disrupt itself than get disrupted. And that makes the P/E ratio of 19.8x earnings look cheap for investors today. If financial results continue to improve, I could see Alphabet being the biggest winner in big tech this year.