Alphabet Nears $4 Trillion Market Value. Is There More Upside for the Stock?

Google-parent Alphabet’s stock is showing no signs of slowing down after a strong finish to 2025.

Alphabet (GOOG)(GOOGL) stock was up about 1% in afternoon trading Thursday, bringing it within a hair of becoming just the fourth company to ever boast a $4 trillion market capitalization. Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT) are the only other companies to have ever passed that milestone, though the later two have fallen below that threshold.

Alphabet on Wednesday became America’s second most-valuable company when its market cap surpassed Apple’s for the first time since 2019.

What’s Spurred the Investor Optimism?

Alphabet shares are off to a strong start to the new year after rising 65% in 2025, the best performance of any Magnificent Seven stock. Investors and tech executives were impressed by the company’s newest AI model, Gemini 3, when it launched in November. Salesforce CEO Marc Benioff said he was “never going back” to using ChatGPT, the chatbot that sparked the AI craze in late 2022. The buzz around Gemini 3 reportedly prompted OpenAI, the Microsoft-backed start-up behind ChatGPT, to declare a “code red” to improve ChatGPT. 

What investors liked as much, if not more, than the model’s performance: That is was trained on custom chips designed in-house. The warm reception of Gemini 3 has helped Alphabet pitch its custom tensor processing units, made in collaboration with Broadcom (AVGO), as an alternative to Nvidia’s graphics processing units, which dominate the AI chip market. 

Alphabet stock also benefited last year from strength in its core advertising business, which accounts for nearly three-quarters of the company’s revenue. In 2024, a federal judge ruled Google operated an illegal search monopoly, and investors entered 2025 nervous the company might be forced to sell its Chrome web browser or Android mobile operating system. Ultimately, the court’s remedies were far less disruptive to Google’s business than many had feared, removing an unknown that hung over the stock throughout the first half of the year. 

At the same time, Google showed Wall Street that AI was not the search engine killer that many predicted. Google launched AI search features that, rather than eroding traffic and revenue, increased engagement and accelerated revenue growth, according to executives. 

What’s Ahead for Alphabet?

This year is likely to bring new challenges for Alphabet as it seeks to defend its pole position in the AI race. Agentic AI—or semi-autonomous AIs that perform tasks on behalf of users—is expected to be one of the hottest topics on Wall Street this year, and investors will likely be looking for Alphabet to launch AIs that are capable of performing tasks like booking flights or making reservations.

Autonomous vehicles are also a focus for investors this year, with market leaders Tesla (TSLA) and Alphabet-owned Waymo expected to significantly expand their operations. Alphabet is also expected to begin offering the public rides in its new “Ojai” robotaxi at some point this year.

Analysts expect another positive year for Alphabet stock, though upside could be limited after its run-up in 2025. Twelve of 15 Wall Street Alphabet analysts with current assessments tracked by Visible Alpha rate the stock a “Buy,” and the remainder are neutral. The average price target of about $332 is only about 2% above the stock’s intraday price on Thursday.