Alphabet’s artificial intelligence strategy is changing how investors see the company.
Momentum strengthened after Alphabet confirmed a multi-year deal under which Apple will base its next generation of AI models on Google’s Gemini platform. The announcement helped ease doubts about Alphabet’s competitive position.
Alphabet’s Class A shares climbed to a record high before paring gains. The stock is now up about 65 percent in 2025, outperforming most large technology peers.
The shift follows a series of strategic moves. Alphabet turned its cloud business into a major growth engine, helped by strong demand for AI services. Google Cloud revenue rose 34 percent in the third quarter, while contracted sales backlog expanded to $155 billion.
The company also began offering its in-house AI chips to external customers, accelerating cloud expansion. Reports suggest Meta Platforms is exploring large-scale chip purchases for future data centres.
Adoption of Gemini continues to expand. Samsung Electronics plans to double the number of AI-powered devices using Gemini this year, reinforcing its reach beyond Google’s own ecosystem.
Alphabet recently overtook Apple in market value for the first time since 2019. It now ranks second globally, behind Nvidia, and joins Microsoft and Apple in the exclusive $4 trillion group.
Importantly, Alphabet’s core advertising business remains stable despite economic uncertainty. A recent US court ruling also removed major breakup risks, allowing the company to retain control over Chrome and Android.
Editor’s Insight
Alphabet’s surge shows how fast markets reward clear execution in AI. The shift from search-led dominance to platform-driven growth reduces long-term risk. For investors, this is less about valuation milestones and more about confidence in Alphabet’s ability to scale AI profitably.
Last modified: January 13, 2026
