E-commerce and cloud giant Amazon (NASDAQ:AMZN) has long dominated the smart speaker space mostly because of first movers advantage. Those days may be over as search giant Google (NASDAQ:GOOG) has made an aggressive push with its smart speakers. Apparently, that aggressive push is paying off which could be a game-changer for Google stock.

New data from Strategy Analytics shows that while Amazon maintained its smart speaker leadership position in the second quarter of 2018, the company is starting to feel the heat from competitors, mostly Google.

A year ago, Amazon controlled more than 75% of the market, while Google owned 16% share. Now, Amazon’s market share has been squeezed to 41%, while Google’s has expanded to 28%.

That is big news.

In many regards, smart speakers are the first mass consumer application of AI. Google’s ability to steal market share at a rapid rate from Amazon is a testament to just how strong Google’s AI technology is. Considering AI is pretty much the future of everything, Google’s leadership position in AI bodes well for future gains in Google stock.

Here’s a deeper look.

Google Is Emerging as the AI King

When it comes to AI, the single most important thing is data. Simply put, the more and better data you have to train AI technologies, the better those AI technologies will be.

Because of this, Google has guaranteed themselves a seat at the AI table over the next several years. Through its global digital search platform that essentially has a monopoly on internet search everywhere besides China, Google has amassed the world’s biggest and arguably most valuable data-set.

We are talking billions of search queries a day from presumably billions of users. Long term, Google will be able leverage that robust data-set to create world leading AI technologies.

This is already happening today.

As stated above, Google’s smart home business is rapidly gaining share. This is one application of Google AI, and one example of Google emerging as the AI king. But, Google’s AI reach extends far beyond the smart home market.

If you haven’t already, go check out Google Duplex. That voice assistant is perhaps the most impressive show of AI capability to-date, and is a glimpse of just how far ahead Google is in consumer applications of AI.

Of course, Google is also leading the charge when it comes to the application of AI in the automotive world. Waymo, Google’s self-driving unit, is widely considered the world leader in autonomous driving, and is looking at launching a commercial ride-hailing service in Arizona later this year.

Put it all together, and on multiple fronts, Google is starting to emerge as the AI king. That implies nothing but positive things for Google stock going forward.

Google Stock Has Big Upside Because of AI

The global AI market will be really big. How big? Easily several trillion dollars big and likely bigger.

Look at smart home. That is a market that is projected to grow at a double-digit rate to $155 billion by 2023. On the self-driving side, the global autonomous vehicles market is expected to grow at a 40% rate to $130 billion by 2027. One study puts the market opportunity at $800 billion by 2035 and $7 trillion by 2050. Cloud computing is a $400 billion and growing market.

Google is at the forefront of each of these AI markets. As such, Google is at the forefront of a multi-trillion dollar opportunity.

Google’s market cap is presently $850 billion. Google got here by being a dominant player in the $600 billion global advertising market. Now, Google is knocking on the door of multiple several hundred billion dollar markets. Naturally, then, you could see Google’s market cap expand by a whole bunch, and GOOG stock shoot way higher in the long run.

Bottom Line on Google Stock

Recent smart home market share gains show that Google is indeed emerging as the king of AI. Considering AI is tomorrow’s biggest market, Google’s leadership position in AI promises sunny days ahead for Google.

As of this writing, Luke Lango was long AMZN and GOOG.