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What is the story about?
Alphabet Inc. broke above a $4 trillion market capitalization on Monday, becoming one of the few companies to ever cross the threshold as investors increasingly see the Google parent as one of the biggest winners of the artificial intelligence boom.
Shares rose as much as 1.7% to $334.04, translating to a market cap of $4 trillion. The company recently overtook Apple Inc. to become the second-largest firm, behind Nvidia Corp. Only Nvidia, Apple, and Microsoft Corp. have topped the $4 trillion barrier, and Nvidia remains the lone company to ever crest $5 trillion.
Monday’s gain came after CNBC reported that Apple had picked the company’s Gemini to run an AI-powered version of its Siri digital assistant. In November, Bloomberg News reported that Apple was planning to pay Alphabet about $1 billion a year for an AI Siri.
The stock has risen 4.8% so far this year, building on last year’s rally of more than 65%, which made it the top performer among the Magnificent Seven. The gain over 2025 added almost $1.5 trillion to Alphabet’s market valuation.
The rapidly improving sentiment reflects of Alphabet is seen as having dominant positions across key areas of AI. Notably, rave reviews for the company’s latest Gemini AI model helped ease concerns about competition from companies like OpenAI, while its tensor processing unit chips are seen as a potentially significant driver of future revenue growth.
“The company’s competitive advantages are not only intact but growing, and no other player has the models, compute, applications, talent, and data to succeed in AI,” said Divyaunsh Divatia, research analyst at Janus Henderson Investors. “It is certainly being seen as a big AI winner, and that strength helps investors feel more comfortable giving it a more-premium valuation than it previously got.”
Shares trade around 28 times estimated earnings, nearly their highest since 2021 and notably above their 10-year average of 20.5. Alphabet’s multiple fell to nearly 14 in mid-2025.
Despite the swelling in valuation, Alphabet continues to trade at a slight discount to the overall Magnificent Seven Index.
The company’s value credentials also got a rare form of validation for a tech company, as Warren Buffett’s Berkshire Hathaway Inc. revealed in November that it had built a stake in Alphabet during the third quarter. The position represents a show of confidence from the legendary investor, who is typically less exposed to tech stocks.
Shares rose as much as 1.7% to $334.04, translating to a market cap of $4 trillion. The company recently overtook Apple Inc. to become the second-largest firm, behind Nvidia Corp. Only Nvidia, Apple, and Microsoft Corp. have topped the $4 trillion barrier, and Nvidia remains the lone company to ever crest $5 trillion.
Monday’s gain came after CNBC reported that Apple had picked the company’s Gemini to run an AI-powered version of its Siri digital assistant. In November, Bloomberg News reported that Apple was planning to pay Alphabet about $1 billion a year for an AI Siri.
The stock has risen 4.8% so far this year, building on last year’s rally of more than 65%, which made it the top performer among the Magnificent Seven. The gain over 2025 added almost $1.5 trillion to Alphabet’s market valuation.
The rapidly improving sentiment reflects of Alphabet is seen as having dominant positions across key areas of AI. Notably, rave reviews for the company’s latest Gemini AI model helped ease concerns about competition from companies like OpenAI, while its tensor processing unit chips are seen as a potentially significant driver of future revenue growth.
“The company’s competitive advantages are not only intact but growing, and no other player has the models, compute, applications, talent, and data to succeed in AI,” said Divyaunsh Divatia, research analyst at Janus Henderson Investors. “It is certainly being seen as a big AI winner, and that strength helps investors feel more comfortable giving it a more-premium valuation than it previously got.”
Shares trade around 28 times estimated earnings, nearly their highest since 2021 and notably above their 10-year average of 20.5. Alphabet’s multiple fell to nearly 14 in mid-2025.
Despite the swelling in valuation, Alphabet continues to trade at a slight discount to the overall Magnificent Seven Index.
The company’s value credentials also got a rare form of validation for a tech company, as Warren Buffett’s Berkshire Hathaway Inc. revealed in November that it had built a stake in Alphabet during the third quarter. The position represents a show of confidence from the legendary investor, who is typically less exposed to tech stocks.
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