Alphabet Inc., the parent company of Google, has reached a staggering $4 trillion valuation for the first time, surpassing Apple to become the world's second-most valuable company. This milestone marks a significant shift in investor sentiment towards Alphabet, with shares surging by over 65% in 2025.
The recent announcement that Apple has chosen Google's Gemini AI model to power its digital assistant Siri, which comes pre-installed on every iPhone, has been seen as a major coup for the tech giant. Apple's decision was reportedly made after careful evaluation, and it is believed that Google's technology provides the most capable foundation for Apple Foundation Models.
The surge in Alphabet's valuation can be attributed to its strong performance in artificial intelligence (AI), with the company having recently unveiled its latest AI model, Gemini, and image generator and editor. The success of these products has helped Alphabet to outperform its peers on Wall Street, with its stock price rising significantly over the past year.
Alphabet's cloud unit has also been a major growth driver for the company, with revenue jumping 34% in the third quarter. The unit's breakneck pace of growth is largely attributed to renting out Google's self-developed AI chips to outside customers.
Meanwhile, Alphabet's advertising business, which drives most of its revenue through Google Search and YouTube, has largely held steady despite economic uncertainty and intense competition. However, the company has faced two landmark US antitrust suits in recent times, with a judge ruling against breaking up the company last year. A trial over how to remedy the alleged monopoly on the online ad market is currently underway.
Despite these challenges, Alphabet's valuation milestone marks a significant victory for investors who had been skeptical about the company's AI strategy. The tech giant's commitment to innovation and its dominance in areas such as search and cloud computing have cemented its position as one of the world's most valuable companies.
The recent announcement that Apple has chosen Google's Gemini AI model to power its digital assistant Siri, which comes pre-installed on every iPhone, has been seen as a major coup for the tech giant. Apple's decision was reportedly made after careful evaluation, and it is believed that Google's technology provides the most capable foundation for Apple Foundation Models.
The surge in Alphabet's valuation can be attributed to its strong performance in artificial intelligence (AI), with the company having recently unveiled its latest AI model, Gemini, and image generator and editor. The success of these products has helped Alphabet to outperform its peers on Wall Street, with its stock price rising significantly over the past year.
Alphabet's cloud unit has also been a major growth driver for the company, with revenue jumping 34% in the third quarter. The unit's breakneck pace of growth is largely attributed to renting out Google's self-developed AI chips to outside customers.
Meanwhile, Alphabet's advertising business, which drives most of its revenue through Google Search and YouTube, has largely held steady despite economic uncertainty and intense competition. However, the company has faced two landmark US antitrust suits in recent times, with a judge ruling against breaking up the company last year. A trial over how to remedy the alleged monopoly on the online ad market is currently underway.
Despite these challenges, Alphabet's valuation milestone marks a significant victory for investors who had been skeptical about the company's AI strategy. The tech giant's commitment to innovation and its dominance in areas such as search and cloud computing have cemented its position as one of the world's most valuable companies.