Alphabet hits $4 trillion valuation as AI refocus lifts sentiment

[Daniel Nenni]

Jan 12 (Reuters) - Alphabet hit a $4 trillion market valuation on Monday, as the Google parent's sharpened artificial intelligence focus allayed doubts about its strategy and thrust it back to the forefront of the high-stakes race.

The tech giant on Wednesday surpassed Apple in market capitalization for the first time since 2019, becoming the second most valuable company in the world.

The milestones mark a remarkable change in investor sentiment for Alphabet, with its stock surging about 65% in 2025, outperforming its peers on Wall Street's elite group of stocks, the so-called Magnificent Seven.

The stock has gained another 6% so far this year, and was last up 1.1%.

The shift was fueled by the company quelling concerns that it let an early AI advantage slip by turning a once-overlooked cloud unit into a major growth engine and drawing a rare tech investment from Warren Buffett's Berkshire Hathaway.

Its new Gemini 3 model has also drawn strong reviews, intensifying pressure on OpenAI after GPT-5 left some users underwhelmed.

A Reuters report said that Samsung Electronics plans to double this year the number of its mobile devices with AI features powered by Google's Gemini.

Google Cloud's revenue jumped 34% in the third quarter, with a backlog of non-recognized sales contracts rising to $155 billion.

Renting out Google's self-developed AI chips that were reserved for internal use to outside customers has also enabled the unit's breakneck pace of growth.

Indicating the rising demand, The Information reported that Meta Platforms was in talks to spend billions of dollars on Alphabet's chips for use in its data centers starting from 2027.

Meanwhile, the company's dominant revenue generator - the advertising business - has largely held steady in the face of economic uncertainty and intense competition.

Alphabet is the fourth company to hit the $4 trillion milestone after Nvidia, Microsoft and Apple.

The stock has also benefited after a U.S. judge in September ruled against breaking up the company and allowing it to retain control of its Chrome browser and Android mobile operating system.

(Reporting by Zaheer Kachwala, Shashwat Chauhan and Johann M Cherian in Bengaluru; Editing by Sriraj Kalluvila)

Alphabet hits $4 trillion valuation as AI refocus lifts sentiment

Alphabet hit a $4 trillion market valuation on Monday, as the Google parent's sharpened artificial intelligence focus allayed doubts about its strategy and thrust it back to the forefront of the...

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[Daniel Nenni]

Thank you AI. It is hard to imagine China or anyone else catching up to the US in AI. We now have two multi $T AI companies with leading edge silicon. Google has hundreds of chip designers and they are hiring big time. Look for a new Google EDA AI group like the other big semiconductor companies have in process.

I would, however, like to know why it took Reuters 4 people from India to write this puff piece? AI could have done a better job in a matter of seconds. Big changes are coming, absolutely.

 

[soAsian]

Google just keep wining.

https://twitter.com/x/status/2010750451667321218

https://twitter.com/x/status/2010754721171063011

There's no doubt that the US is betting the whole farm on AI. With David Sacks as AI czar, AI is sure to be a top priority for the Trump administration. China is also going all-in on AI. The cat's out of the bag. there's no turning back now.

 

[ChrisGar]

It will be interesting to see how this evolves.
Apple may start by using Google's Cloud -- but I'd guess Apple will want to control their data (used for AI training), costs and avoid lock-in over time. So they will use Google's technology & chips (and software) and build their own Data Centers. From public announcements, it sounds like Anthropic will build their Google-based Data Centers using that model also.

 

[blueone]

It will be interesting to see how this evolves.
Apple may start by using Google's Cloud -- but I'd guess Apple will want to control their data (used for AI training), costs and avoid lock-in over time. So they will use Google's technology & chips (and software) and build their own Data Centers. From public announcements, it sounds like Anthropic will build their Google-based Data Centers using that model also.

I keep reading about other companies using Google chips in their datacenters, but I continue to be a skeptic. It might be practical for other companies to buy Google's Axion CPU, because Axion uses all standard interfaces like PCIe, Ethernet, and DDR, but for TPUs, I don't see how it's practical. TPUs only connect to Google proprietary networks, so you need their network chips and specialized software stacks, which probably means you also need to run a Google server OS, which is a proprietary version of Linux. Even assuming Google agreed to license all of this stuff, Google would have to have an external support group, which for so much proprietary technology is going to be expensive. And annoying, because once you have external customers they'll want a voice in future hardware and software features, and then Google starts looking like Intel or AMD, but without so much product revenue.

So I'm not buying this notion that companies like Apple will be licensing TPUs or even Axions, no less proprietary networks. If anyone wants Google technology it only looks practical by using Google Cloud.