Alphabet’s Stock Surges Amid AI Advancements and Market Resilience

NEW YORK, December 29, 2025 — Alphabet Inc. has become one of the major winners in the technology stock rally of 2025, bolstered by its advancements in artificial intelligence. Since September 1, the company’s stock has risen about 48%, leading to a year-to-date increase of 60.5% and selling for over $300 per share, more than double its previous all-time high in 2021.

The positive performance is largely attributed to the launch of Alphabet’s new Gemini 3 AI model, which analysts believe has established the company as a leader in the AI race. Morningstar analyst Malik Ahmed Khan stated, “Gemini 3 is a major step up from prior models and positioned Alphabet as an AI leader, not a laggard.” The new model’s ability to generate text, video, and images has given Alphabet a competitive edge over its rivals, including OpenAI’s ChatGPT.

Alphabet’s strong third-quarter earnings and a resolution to its antitrust concerns have also contributed to its rally. Khan noted that fears surrounding Google‘s ability to sustain its search business were alleviated following the company’s impressive earnings results, which showed strength in Google Search, dispelling the narrative that it was failing to compete effectively.

Google’s monthly active users reportedly increased from 450 million to approximately 650 million following the release of Gemini 3. Khan emphasizes the importance of sustained performance in both the search and cloud divisions for the continued success of the stock. However, risks remain, including potential slowdowns in cloud growth and increased capital expenditures.

Alphabet is also focusing on in-house tensor processing units, enhancing its AI technology. Khan mentioned this development as a new opportunity for monetization, although the scalability of TPU production could pose challenges due to constraints in manufacturing.

Investors are cautious but optimistic, with Khan asserting, “30%-40% of Alphabet’s business value comes from Google Search,” highlighting its critical role in the future of the company. The general consensus among analysts is that Alphabet’s valuation remains attractive, with a fair value estimate sitting at $340 per share.