"Why Alphabet performed well this year Alphabet actually didn't start the year strong. However, at least two things happened that helped it reverse course. First, Alphabet posted excellent financial results. The company's work in cloud computing and artificial intelligence (AI) has been tremendously helpful. The tech leader is showing that, despite competition from AI chatbots, it remains the leader in search, while providing in-demand AI services through the cloud."
"Second, Alphabet had a major legal win, or at least, a loss that felt like a win. The tech giant was awaiting a decision from a judge on an antitrust lawsuit filed by the U.S. Department of Justice. Alphabet was accused of holding a monopoly in internet search, but the company managed to avoid the worst-case scenario of having to divest its Google Chrome browser, an important cog in its advertising machine. With that significant threat out of the way, Alphabet looks unstoppable."
"One more reason why Alphabet outperformed its Magnificent Seven peers was that it looked more reasonably valued, at least when considering traditional valuation metrics. That remains the case (check out the charts below), and that's a good reason to be optimistic about the company's medium-term prospects. And one of Alphabet's most important growth drivers over the next five years will continue to be AI."
Alphabet's shares gained substantially this year, led by a 63% increase that outpaced peers. The company reversed a slow start after posting excellent financial results driven by cloud computing and artificial intelligence services. Search leadership remained intact despite competition from AI chatbots, while cloud-delivered AI products and the Gemini 3 subscription expanded offerings. A favorable legal outcome eased antitrust concerns by avoiding divestiture of the Chrome browser, removing a significant threat to advertising operations. Traditional valuation metrics indicate Alphabet appears reasonably valued relative to peers. Continued AI integration across products and services should support medium-term profitability and growth through 2026.
Read at The Motley Fool
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