Alphabet surpassed Apple in market value this week, marking the first time Google's parent company has held the position since 2019. The shift occurred as Alphabet's valuation reached $3.89 trillion compared to Apple's $3.85 trillion on Wednesday.
Alphabet shares rose 2.5% on Wednesday, pushing the company's market capitalization ahead of Apple for the first time in nearly seven years. Apple shares fell more than 4% over the past five days, closing at $3.84 trillion.
The reversal reflects divergent AI strategies between the two tech giants. Alphabet's stock surged 65% throughout 2025, while Apple gained only 9% during the same period. Investors have rewarded Alphabet's aggressive AI push while questioning Apple's slower progress.
Google's Gemini 3 model, launched in November 2025, received strong market reception and reportedly prompted OpenAI to declare a "code red" response. The AI model's performance, combined with Alphabet's custom tensor processing units developed with Broadcom, positioned the company as a serious alternative to Nvidia's AI chip dominance.
Website traffic data from Similarweb shows Gemini now holds over 20% market share, up from less than 6% one year ago. ChatGPT's share fell to under 65% from roughly 85% during the same period, though OpenAI maintains approximately 900 million weekly active users versus Gemini's 650 million monthly users.
Alphabet's cloud business signed more deals worth over $1 billion in 2025 through the third quarter than in the two prior years combined, according to CEO Sundar Pichai. The company also avoided disruptive outcomes in its federal antitrust case, removing regulatory uncertainty that had weighed on the stock earlier in 2025.
Apple faces growing investor skepticism about its AI roadmap. The company delayed its AI-enhanced Siri voice assistant, originally expected in 2025, and now plans to launch a "more personal Siri" in 2026. Raymond James downgraded Apple this week, warning that meaningful gains will be difficult to achieve this year.
Alphabet's custom AI hardware, including its seventh-generation TPU "Ironwood" accelerator revealed in November, has attracted interest from major technology firms seeking alternatives to Nvidia's GPUs. The chips have drawn attention from companies including Meta and AI startups such as Anthropic.
Warren Buffett's Berkshire Hathaway disclosed a $4.3 billion stake in Alphabet at the end of the third quarter of 2025, according to regulatory filings. The stock has risen significantly since that disclosure. Cantor Fitzgerald upgraded Alphabet to Overweight from Neutral in early January 2026, raising its price target to $370 from $310.
Analysts note that 12 of 15 Wall Street Alphabet analysts tracked by Visible Alpha rate the stock a "Buy," with the remainder neutral. The average price target of about $332 represents approximately 2% upside from current levels.
Both companies trail market leader Nvidia, which maintains a $4.6 trillion valuation. Microsoft and Apple have both fallen below the $4 trillion threshold they previously crossed, while Alphabet now approaches that milestone.
Google's AI integration across search, maps, and payment systems provides what analysts describe as a "unique competitive advantage in grounding user AI queries." This ecosystem positions Gemini for practical usefulness as AI agents become mainstream for multistep tasks.
The market shift represents the most significant change in Big Tech rankings since Alphabet last held the number two spot in 2019. Investors will watch whether Apple Intelligence can gain traction this year and how both companies navigate the accelerating AI competition.
