Alphabet briefly touched a $4 trillion market valuation on Monday. This milestone highlights a significant shift in investor sentiment toward the Google parent company. Its renewed focus on artificial intelligence has effectively addressed previous doubts about its strategic direction.
Alphabet Surpasses Apple in Market Cap
Last week, Alphabet overtook Apple in market capitalization for the first time since 2019. This move secured its position as the second most valuable company globally. The company's class-A shares rose as much as 1.7% to reach a record high of $334.04 during trading.
AI Partnerships Drive Growth
In a clear sign that its efforts are paying off, Alphabet announced a multi-year deal with Apple. Under this agreement, the next generation of Apple's AI models will be based on Google's Gemini technology. This partnership underscores Alphabet's growing influence in the AI sector.
A Reuters report earlier this year indicated that Samsung Electronics plans to double the number of its mobile devices featuring AI capabilities powered by Gemini in 2026. These developments demonstrate the expanding reach of Alphabet's AI solutions.
Investor Sentiment Shifts Positively
The milestones mark a remarkable change in how investors view Alphabet. Its stock surged approximately 65% in 2025, outperforming its peers in Wall Street's elite group known as the Magnificent Seven. This performance reflects growing confidence in the company's strategic pivot.
Phil Blancato, CEO of Ladenburg Thalmann Asset Management, commented on this transformation. He noted that Alphabet has surprised many over the past twelve months. The company is making inroads beyond its traditional business model through continuous innovation.
Cloud Unit Becomes Major Growth Engine
Alphabet successfully quelled concerns about losing its early AI advantage by transforming its once-overlooked cloud unit into a significant growth driver. Google Cloud's revenue jumped 34% in the third quarter. The backlog of non-recognized sales contracts rose to $155 billion, indicating strong future demand.
Renting out Google's self-developed AI chips to external customers has accelerated this unit's growth. These chips were previously reserved for internal use only. The Information reported that Meta Platforms is in talks to spend billions of dollars on Alphabet's chips for its data centers starting in 2027.
New AI Model Receives Strong Reviews
The new Gemini 3 model has drawn positive feedback from users and experts. This reception has intensified pressure on competitors like OpenAI, especially after GPT-5 left some users underwhelmed. Alphabet's innovation in AI continues to set it apart in the competitive tech landscape.
Advertising Business Remains Steady
Despite economic uncertainty and intense competition, Alphabet's dominant revenue generator—the advertising business—has largely held steady. This stability provides a solid foundation as the company expands into new areas like AI and cloud services.
Legal Victory Supports Growth
Alphabet's stock also benefited from a legal victory in September. A U.S. judge ruled against breaking up the company, allowing it to retain control of its Chrome browser and Android mobile operating system. This decision removed a significant overhang on the stock.
Alphabet is now the fourth company to hit the $4 trillion milestone, following Nvidia, Microsoft, and Apple. Its strategic focus on AI, coupled with strong execution in cloud services and stable advertising revenue, positions it well for continued growth in the evolving tech industry.
