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Alphabet reaches $4 trillion valuation on renewed AI focus

Alphabet briefly crossed the $4 trillion market capitalisation mark, underscoring a sharp turnaround in investor sentiment driven by the Google parent’s renewed focus on artificial intelligence and cloud computing.

The milestone makes Alphabet the fourth company to reach the $4 trillion level, after Nvidia, Microsoft and Apple. Shares of Alphabet’s Class A stock climbed as much as 1.7% to a record high of $334.04 before paring gains later in the session.

The rally followed confirmation of a multi-year partnership under which Apple’s next generation of AI models will be built on Google’s Gemini platform. The deal was seen as a major endorsement of Alphabet’s AI capabilities and helped ease lingering concerns that the company had fallen behind rivals in the fast-moving AI race.

Alphabet last week overtook Apple in market capitalisation for the first time since 2019, becoming the world’s second-most valuable listed company.

AI Momentum Drives Market Re-rating

Alphabet’s stock has surged about 65% over the past year, outperforming most of its peers among Wall Street’s so-called “Magnificent Seven” technology giants. Analysts say the rebound reflects confidence in management’s ability to convert early AI research into scalable commercial products.

A key factor has been the rapid growth of Google Cloud, which has emerged as a central pillar of Alphabet’s AI strategy. The unit reported a 34% jump in revenue in the third quarter, while its backlog of contracted but unrecognised revenue climbed to $155 billion.

Alphabet has also begun renting out its internally developed AI chips to external customers, accelerating demand for its infrastructure and strengthening its position against competitors in the cloud market.

Gemini Gains Traction, Ads Remain Resilient

The company’s latest Gemini 3 AI model has received strong industry reviews, increasing competitive pressure on OpenAI after mixed reactions to GPT-5. Samsung Electronics is also expected to expand the number of AI-enabled devices powered by Gemini this year, according to earlier reports.

Meanwhile, Alphabet’s core advertising business — its largest revenue driver — has remained resilient despite economic uncertainty and intensifying competition.

Investor confidence has also been supported by a U.S. court ruling last year that rejected a proposal to break up the company, allowing Alphabet to retain control of Chrome and Android.

Together, the developments signal a broad re-rating of Alphabet’s growth prospects as AI becomes central to its long-term strategy.