Alphabet (GOOG) has been the second-worst performer among the “Magnificent 7” stocks over the past year. But while investors focus on lagging returns, they may be overlooking the explosive growth potential of its crown jewel, YouTube.
In fact, some analysts believe it’s the world’s largest media company in the making, thanks to Google’s aggressive embrace of artificial intelligence (AI).
Unlike many traditional players that have resisted AI, YouTube has leaned into it. The platform now openly permits AI-generated content as long as it’s original, offers value, and includes some human involvement.
In other words, YouTube’s stance on AI is: “It’s fine as long as it’s not spam.”
An estimated 92% of creators are already using generative AI on YouTube. Stock analyst Shay Boloor noted that this makes the platform “not just the biggest media company, but the most AI-native, too.”
More AI-driven content means more videos, more views, and ultimately more ad dollars.
$GOOGL YOUTUBE JUST SURPASSED $DIS AS THE WORLD'S BIGGEST MEDIA COMPANY
undefined Shay Boloor (@StockSavvyShay) July 25, 2025
92% of creators on the platform are now using generative AI -- making it not just the biggest media company, but the most AI-native too. pic.twitter.com/KgZWHNnkqO
Reach and revenue surge
YouTube’s scale is staggering. The platform counts over 2.5 billion monthly active users, second only to Google Search in web traffic. Subscription services are also booming, with YouTube Premium and Music amassing 125 million paid users.
In its latest quarter, Alphabet reported revenue of $96.43 billion and earnings of $2.31 per share, beating estimates of $94 billion and $2.18. YouTube contributed $9.8 billion in ad revenue — above the $9.56 billion consensus — and has grown ad revenue 36% since Q2 2021.
By revenue, YouTube is projected to surpass 3 billion viewers by 2029 and overtake The Walt Disney Company (DIS) as the largest media company globally by year-end, according to Bloomberg.
That trajectory suggests substantial growth potential ahead despite its already massive reach.
A small piece of a giant
Ironically, YouTube still represents only a fraction of Alphabet’s business. Segments like Google Search, Subscriptions, Platforms and Devices, and Google Cloud generate the lion’s share of Google’s revenue.
But as YouTube’s dominance grows and its AI-driven model scales, analysts argue that GOOG’s $195 share price — translating to a $2.3 trillion market cap — may not fully reflect the potential of its media powerhouse.
If projections hold and YouTube surpasses Disney by year-end, Alphabet’s quiet laggard status in the Magnificent 7 may not last much longer.
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