Google’s parent company is the fourth firm to hit the $4tn mark, following Nvidia, Microsoft, and Apple.
Expectations around artificial intelligence have sent tech valuations to record highs over the past year. Eager to ride the wave of digital innovation, investors have been pouring money into firms close to the action, hopeful for high returns. Despite warnings of overvaluations — even coming from Google’s CEO himself — Silicon Valley’s star players continue to see their market caps rise. On Monday, Alphabet joined giants Nvidia, Microsoft, and Apple when it surpassed the $4 trillion valuation mark for the first time. This makes it the world’s second-most valuable company, after chipmaker Nvidia.
Multiple factors contributed to Alphabet’s recent rise, with its stock having jumped around 75% over the past year — and nearly 7% since the start of January. A notable boost came from Apple’s decision to use Google’s Gemini AI model as part of an upgrade to its digital assistant Siri. The value of the deal, announced on Monday, hasn’t been disclosed. But the news amounts to a vote of confidence in Google’s ability to compete in the new realm of AI.
After the initial success of OpenAI’s ChatGPT sent jitters through Google, the established firm doubled down on its innovation efforts, launching its Gemini 3 model to stellar reviews. “I expect the vibes out there to be rough for a bit,” said OpenAI’s CEO Sam Altman following the launch. Although Google missed out on the “big break” for chatbots, Gemini 3 has outperformed rivals on several benchmarks. In a press briefing last winter, Google said the information offered up by Gemini 3 was 72% accurate, according to a standard benchmark test. Compared to the company’s previous models, Gemini 3 can more fluidly mix graphics and text when responding to user queries, and its coding abilities have been upgraded.
Google’s funding model equally gives it an advantage over unprofitable, start-up competitors like OpenAI and Anthropic, which have to constantly raise new funding to survive. Even so, while Google has incorporated “AI mode” into its search engine — resembling a chatbot model, OpenAI and Perplexity have both launched their own web browsers in recent months. Joining the fray, Microsoft has also added its Copilot AI tool to its Edge browser, highlighting how the battle for the internet is heating up.
Danni Hewson, head of financial analysis at AJ Bell, told Euronews that Google is expertly handling the competition, despite “concerns that many of the last decade’s disrupters might become this decade’s disrupted”. “Alphabet is consistently making smart innovations which should keep them relevant for years to come, even as it steers out of its own well-trodden lane,” she said.
Amid this jostling, Google’s search dominance has attracted significant scrutiny in recent years due to a number of high-profile court cases. The September conclusion of a legal challenge in the US is credited with helping the firm reach its $4 trillion milestone, with the firm escaping more lightly than expected. Responding to antitrust concerns, a judge ruled that Google must share data from its search engine with competitors. The ruling nonetheless determined that a breakup of the company wasn't necessary, allowing Google to retain control of its Chrome browser. A US trial over the legality of the company’s ad tech business has yet to deliver a verdict.
“Search remains the core business for Alphabet and following the resolution of the antitrust case, potential headwinds here have been removed,” said Ben Barringer, head of technology research at Quilter Cheviot. “However, it is not just search that drives the valuation, with YouTube, cloud computing, and Waymo also all contributing heavily,” he told Euronews. When Alphabet last published earnings results in October, the firm reported higher-than-expected revenue for the third quarter. Google Cloud revenues increased 34% to $15.2bn, and YouTube advertising turnover rose 15% to $10.26bn.
Competing against major competitors like Amazon’s AWS and Microsoft’s Azure, cloud competition is fierce for Alphabet. The firm has, however, secured a number of advantageous deals, notably supplying up to 1 million of its specialised AI chips to Anthropic. Originally trained for internal workloads, the chips are now available to external cloud customers, improving smaller firms’ access to expensive AI hardware. Such a move has allowed Google’s cloud unit to grow rapidly.
“Alphabet is very much a ‘sum of the parts’ story, with a number of businesses at the forefront of their sector,” concluded Barringer. “If it can stabilise revenues from search advertising and YouTube and keep up the momentum in the Cloud business, then, yes, it can keep up momentum.” Even so, the stock continues to come with a high price tag — one that is arguably overvalued when compared against earnings growth expectations. Investors will be closely watching for signs that the AI boom is slowing down, warned Barringer.
