"Undoubtedly, it really was Alphabet's year, with Google Gemini making massive strides in the AI race, growing its userbase at an impressive pace at the expense of the likes of ChatGPT. At the same time, Google's AI Mode and AI Overviews have helped ease concerns that some investors may have had over AI's potential to erode the great, wide moat of Google Search."
"After a few solid quarters and continued momentum in AI capabilities, it seems like Google Search is looking virtually untouchable again. Given the sheer momentum behind Google, its AI efforts, as well as the share price, it seems unwise to stand in the way of the $3.8 trillion titan, especially as we learn more about its hardware efforts, with TPUs, which may very well give Google a big slice of the AI chip market."
"Indeed, AI chips could add hundreds of billions to the market cap. Google could be in for an even bigger 2026 Only time will tell how many other big spenders it can ink deals with going into 2026. As circular dealmaking across big AI companies grows, my guess is that Google stands to gain further traction as it makes more deals that might warrant an even higher multiple on the shares."
Alphabet closed 2025 as a top-performing large-cap driven by Google Gemini adoption and strong AI momentum. Google Gemini expanded its user base rapidly, diverting usage from competitors like ChatGPT, while AI Mode and AI Overviews reduced concerns about AI eroding Google Search's competitive moat. Google Search appears highly resilient after consecutive strong quarters. TPU hardware efforts may allow Google to capture meaningful AI chip market share and materially increase market capitalization. Waymo's robotaxi potential and ongoing AI dealmaking create multiple catalysts for 2026, though execution risk and heightened expectations remain key uncertainties.
Read at 24/7 Wall St.
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