Alphabet briefly reached a $4 trillion market valuation on Monday, as its sharpened focus on artificial intelligence eased investor concerns about its long-term strategy and pushed the company back to the center of the global tech race. Highlighting the momentum of its AI push, Alphabet announced that Apple’s next generation of AI models will run on Google’s Gemini platform under a multi-year agreement. Alphabet’s Class A shares climbed as much as 1.7% to $334.04, setting a new record before retreating from those highs.

Earlier this year, Reuters reported that Samsung Electronics plans to double the number of Gemini-powered AI smartphones it releases in 2025. Last week, Alphabet overtook Apple in market capitalization for the first time since 2019, becoming the world’s second most valuable company. These milestones reflect a dramatic turnaround in investor sentiment. Alphabet’s stock has surged about 65% in 2025, making it one of the strongest performers among Wall Street’s elite group of stocks known as the Magnificent Seven.

The rally has been driven by the company addressing fears that it had lost its early AI lead. It transformed its once-overlooked cloud division into a major growth driver and even attracted a rare technology investment from Warren Buffett’s Berkshire Hathaway. “Among the Magnificent Seven, Alphabet is the biggest surprise of the past year,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. “They are expanding well beyond their traditional business model. What truly sets them apart is innovation, and that’s now clearly visible in their earnings.”

Alphabet’s new Gemini 3 model has received strong reviews, increasing pressure on competitors after some users found GPT-5 underwhelming. Google Cloud revenue jumped 34% in the third quarter, with its backlog of unrecognized sales contracts reaching $155 billion. Growth has also been fueled by Alphabet’s decision to rent out its internally developed AI chips to external customers. According to The Information, Meta Platforms is in talks to spend billions on these chips starting in 2027 for its data centers.

Meanwhile, Alphabet’s core advertising business remains resilient, holding up well despite economic uncertainty and intensifying competition. Alphabet becomes only the fourth company in history to reach the $4 trillion valuation milestone, following Nvidia, Microsoft, and Apple. The stock also gained support after a U.S. court ruling in September allowed the company to retain control of its Chrome browser and Android operating system, rejecting a proposed breakup.