Alphabet hits $4t valuation as AI refocus lifts sentiment
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
Highlights:
- Alphabet becomes fourth company to hit $4 trillion level
- Stock up on Monday after Google-Apple AI deal
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.
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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.
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.
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 US judge in September ruled against breaking up the company and allowing it to retain control of its Chrome browser and Android mobile operating system.
