Alphabet briefly achieved a market valuation of $4 trillion on Monday, as the Google parent company’s enhanced focus on artificial intelligence (AI) eased doubts about its strategic direction and propelled it to the forefront of the competitive tech arena.
In a significant development, Alphabet announced that Apple’s next-generation AI models will be powered by Google’s Gemini under a multi-year agreement. This move underscores Alphabet’s commitment to advancing its AI capabilities.
The company’s class-A shares experienced a surge, rising by as much as 1.7% to $334.04, marking a record high before retracting some gains.
Earlier this year, a Reuters report highlighted Samsung Electronics’ plans to double the number of its mobile devices featuring AI capabilities powered by Gemini.
Alphabet recently surpassed Apple in terms of market capitalization for the first time since 2019, securing its position as the second most valuable company globally.
This achievement reflects a significant shift in investor sentiment toward Alphabet, with its stock appreciating by approximately 65% in 2025, outperforming its peers within Wall Street’s elite “Magnificent Seven” group of stocks.
The transformation was driven by the company’s successful efforts to address concerns about losing its early AI lead. Alphabet turned its once-overlooked cloud unit into a major growth driver and attracted a rare tech investment from Warren Buffett’s Berkshire Hathaway.
Phil Blancato, CEO of Ladenburg Thalmann Asset Management, remarked, “Among 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.” He added, “What I would give the company credit for is innovation. That’s what they’ve done to separate themselves from a lot of other firms in recent days, and you’re seeing it in earnings data.”
The new Gemini 3 model has received strong reviews, putting pressure on OpenAI after GPT-5 left some users underwhelmed.
Google Cloud’s revenue surged by 34% in the third quarter, with a backlog of unrecognized sales contracts increasing to $155 billion. Additionally, the decision to rent out Google’s AI chips, previously reserved for internal use, to external customers has contributed to the unit’s rapid growth.
Highlighting the growing demand, a report from The Information indicated that Meta Platforms is in discussions to invest billions of dollars in Alphabet’s chips for its data centers starting in 2027.
Meanwhile, Alphabet’s primary revenue source, the advertising business, has remained resilient despite economic uncertainty and fierce competition.
Alphabet is the fourth company to reach the $4 trillion milestone, following Nvidia, Microsoft, and Apple.
The stock has also benefited from a U.S. judge’s decision in September, which ruled against breaking up the company, allowing it to maintain control over its Chrome browser and Android mobile operating system.
