Alphabet stock surged 65% in 2025, marking its strongest annual performance since 2009. The Google parent company's shares climbed throughout the year before hitting a $4 trillion valuation in January 2026.
The rally accelerated after Apple announced it would use Google's Gemini AI to power the next version of Siri. The multi-year deal, confirmed on January 12, gives Alphabet access to Apple's installed base of over two billion active devices.
Alphabet became the fourth company to reach the $4 trillion milestone, joining Nvidia, Microsoft, and Apple. The company briefly touched $4.03 trillion in market value during Monday's trading session.
Google's Gemini 3 model launched in December 2025 to positive reviews, competing closely with OpenAI's GPT-5 on various benchmarks. The AI model achieved 72% accuracy on standard benchmark tests according to Google's winter briefing.
Google Cloud revenue jumped 34% in the third quarter of 2025, reaching $15.2 billion. The cloud unit carries $155 billion in non-recognized sales contracts, indicating sustained enterprise demand.
A September 2025 court ruling provided significant regulatory relief. Judge Amit Mehta ruled against breaking up Alphabet, allowing Google to retain control of its Chrome browser and Android operating system.
The stock jumped 9% on September 3 following the antitrust decision. Investors viewed the ruling as removing the biggest risk facing the company.
Warren Buffett's Berkshire Hathaway invested over $4.3 billion in Alphabet during the third quarter. The rare tech bet from the legendary investor boosted market confidence in Google's AI strategy.
Samsung Electronics plans to double its Gemini-powered mobile devices in 2026. The expansion follows Samsung's adoption of Google's AI technology for its Galaxy AI features.
Alphabet opened its proprietary AI chips to external customers after previously reserving them for internal use. Meta Platforms is reportedly negotiating a multi-billion dollar deal for Alphabet's custom AI chips starting in 2027.
The company introduced Ironwood in November 2025, its seventh-generation tensor processing unit. Industry analysts view the chip as direct competition for Nvidia's dominant processors.
Alphabet's third-quarter 2025 financial results showed revenue exceeding $100 billion for the first time. Total revenue reached $102.3 billion, representing 16% year-over-year growth.
Net income jumped 33% to $34.9 billion, while earnings per share climbed 35% to $2.87. Both metrics significantly exceeded analyst expectations.
Google Services, which includes Search and YouTube advertising, grew 14% compared with the prior year. The advertising business maintained steady revenue despite economic uncertainty and intense competition.
Analysts upgraded Alphabet stock in early January 2026. Cantor Fitzgerald raised its price target to $370 from $310, citing easing antitrust concerns and Google's massive user base across search, Chrome, and Android.
Canaccord Genuity increased its target to $390 from $330, maintaining a buy rating. The firm cited search stability, accelerating AI innovation, strong cloud growth, and regulatory relief as key drivers.
Alphabet now stands as the world's second most valuable company, surpassing Apple in market capitalization for the first time since 2019. The stock overtook Apple last week as investor sentiment shifted toward Google's AI strategy.
The company's Gemini monthly users grew from 450 million last summer to 650 million today. Google began rolling out AI-powered features in Gmail this month, including automatic conversation summaries and context-aware drafting tools.
Google Cloud continues to be a standout growth driver, with 70% of customers already using AI products according to Citi analysts. The unit has accelerated growth by renting out internally developed AI chips to external customers.
Alphabet's advertising business remains its primary revenue source, performing steadily despite broader economic uncertainty. Search-and-other advertising revenue rose about 15% in the third quarter, defying expectations that generative AI would erode Google's core business.
The company projects 2025 capital expenditures between $91 billion and $93 billion. This investment accelerates data center construction, AI infrastructure, and cloud capacity to support long-term growth.
Analysts forecast earnings per share of $10.58 for fiscal 2025, a 32% year-over-year increase. They expect further growth to $11.04 in 2026.
Alphabet's turnaround represents a significant shift from early 2023 concerns. Following ChatGPT's launch in November 2022, investors feared Google Search faced a mortal threat from AI chatbots.
The company has since delivered consistent growth while maintaining dominant market share in search. Through the first three quarters of 2025, revenue rose 14% to $289 billion with operating income growing similarly to $93.1 billion.
Alphabet's position across multiple AI infrastructure layers creates durable competitive advantages according to market analysts. Decade-long investments in custom chips, cloud services, and foundational models position the company for sustained growth.
The stock currently trades at 29.7 times forward earnings, a premium compared to the sector median. Wall Street maintains a consensus strong buy rating, with 45 of 55 analysts recommending strong buy positions.
Alphabet's average analyst price target stands at $334.23, representing 1% potential upside from current levels. The street-high target of $400 suggests the stock could rally as much as 21%.
The company's Waymo autonomous vehicle service continues expanding and could become its next major revenue stream. Alphabet's diversified business portfolio includes Google Services, Google Cloud, and forward-looking initiatives like Waymo and Verily.
Alphabet's resurgence demonstrates how the company transformed early AI concerns into competitive advantages. What began as investor anxiety about ChatGPT's threat to Google Search evolved into market leadership across AI infrastructure, cloud services, and consumer applications.
The $4 trillion valuation milestone caps a remarkable year for the tech giant. Alphabet's 65% stock gain in 2025 outperformed all other Magnificent Seven companies, marking the company's strongest annual performance in over a decade.
