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Key Takeaways
- Alphabet stock rose Wednesday, extending a recent rally that’s made it the best-performing member of the Magnificent 7 so far this year.
- Google on Tuesday released Gemini 3, the latest iteration of its flagship AI model. And Berkshire Hathaway surprised Wall Street earlier this week when it revealed a $5 billion bet on the tech giant.
Alphabet has its groove back.
Shares of Alphabet (GOOG, GOOGL) were up nearly 4% in Wednesday afternoon trading, pacing the Magnificent Seven as tech stocks found some footing after days of declines. The gains put Alphabet stock up about 55% since the start of the year, nearly 20 percentage points better than the Mag 7’s next-best performer, Nvidia (NVDA). Halfway through the year, it was in the red.
Tech stocks have been pressured this month by anxiety about the sector’s big investments in AI, but Alphabet is bucking the trend: Heading into Wednesday’s session, it was the only Mag 7 stock up since the start of November.
Why This Matters to Investors
The hottest Magnificent 7 stock this year is Nvidia, right? Nope: It’s Alphabet, the Google parent that has lately gotten a lift from two rather disparate sources. One was Warren Buffett, the legendary investor whose company recently took a stake—and the other was optimism about the latest version of its Gemini AI model.
Two developments have helped power the stock higher lately. Alphabet on Tuesday released Gemini 3, the latest iteration of its flagship AI model. Executives at Google DeepMind, the company’s AI unit, called Gemini 3 “the best model in the world for multimodal understanding and our most powerful agentic and vibe coding model yet.”
“I was impressed by it,” Ben Reitzes, head of tech research at Melius, said of Gemini 3 during an appearance on CNBC Wednesday. “I think it’s a big leap from the prior models.” Reitzes said that investors were likely surprised by Alphabet’s claim yesterday that the Gemini app has more than 650 million monthly users, suggesting a strong competitive position.
Alphabet stock also got a boost earlier this week from an unlikely source. Berkshire Hathaway (BRK.B) revealed it made a rare bet on tech with a nearly $5 billion investment in Alphabet last quarter, linking the stock to legendary investor and longtime CEO Warren Buffett, who is stepping down at the end of the year.
What Wall Street Thinks of Google Stock Now
The AI rally stalled in recent weeks amid concerns about overvalued tech stocks and unsustainable infrastructure spending. Some investors fear future AI demand will fail to meet Silicon Valley’s expectations, leaving tech companies like Microsoft (MSFT), Amazon (AMZN), Meta (META), and Oracle (ORCL) with a glut of data center capacity and, possibly, mountains of debt. Those concerns have prompted some to bet against big tech stocks.
Alphabet’s earnings report at the end of October may have allayed some of those fears, at least as they pertain to Google. Alphabet raised its full-year investment forecast for the third time this year, and reported that growth accelerated across the company. The results assured some investors that, contrary to expectations, AI is enhancing Google’s core search business.
Experts are generally optimistic about the outlook for Alphabet stock. Twelve of the 15 analysts with current ratings tracked by Visible Alpha recommend buying the stock, and the remainder rate it a “hold.” Their average price target of $324 implies about 14% upside from Tuesday’s close.
