Alphabet briefly hit $4 trillion in
market valuation on Monday, as the Google parent’s sharpened
artificial intelligence focus allayed doubts about its strategy
and thrust it back to the forefront of the high-stakes race.
In the latest sign that its efforts were paying off,
Alphabet said the next-generation of Apple’s AI models
will be based on Google’s Gemini under a multi-year deal.
The company’s class-A shares rose as much as 1.7%
to $334.04 to hit a record high before giving up those gains.
A Reuters report earlier this year said that Samsung
Electronics plans to double this year the number of
its mobile devices with AI features powered by Gemini.
Alphabet last week surpassed Apple in market capitalization
for the first time since 2019, becoming the second most valuable
company in the world.
The milestones mark a remarkable change in investor
sentiment for Alphabet, with its stock surging about 65% in
2025, outperforming its peers on Wall Street’s elite group of
stocks, the so-called Magnificent Seven.
The shift was fueled by the company quelling concerns that
it let an early AI advantage slip by turning a once-overlooked
cloud unit into a major growth engine and drawing a rare tech
investment from Warren Buffett’s Berkshire Hathaway.
“Of the Magnificent 7 stocks, it’s the one name that has
surprised us all over the last 12 months and they’re making
inroads beyond their traditional model,” said Phil Blancato, CEO
of Ladenburg Thalmann Asset Management.
“What I would give the company credit for is innovation,
that’s what they’ve done to separate them from a lot of other
firms in recent days and you’re seeing it in earnings data.”
The new Gemini 3 model has drawn strong reviews,
intensifying pressure on OpenAI after GPT-5 left some users
underwhelmed.
Cloud growth
Google Cloud’s revenue jumped 34% in the third quarter, with
a backlog of non-recognized sales contracts rising to $155
billion.
Renting out Google’s self-developed AI chips that were
reserved for internal use to outside customers has also enabled
the unit’s breakneck pace of growth.
Indicating the rising demand, The Information reported that
Meta Platforms was in talks to spend billions of
dollars on Alphabet’s chips for use in its data centers starting
from 2027.
Ad resilience
Meanwhile, Alphabet’s dominant revenue generator – the
advertising business – has largely held steady in the face of
economic uncertainty and intense competition.
Alphabet is the fourth company to hit the $4 trillion
milestone after Nvidia, Microsoft and Apple
.
The stock has also benefited after a U.S. judge in September
ruled against breaking up the company and allowing it to retain
control of its Chrome browser and Android mobile operating
system.