Alphabet Valuation Surges on AI Momentum
Alphabet valuation rose to $4 trillion after AI optimism and reports Apple will use Gemini; Google Cloud growth and a large backlog supported a rerating.
KEY TAKEAWAYS
- Alphabet reached a $4 trillion market capitalization on Jan. 12, 2026.
- Reports that Apple will use Gemini models narrowed doubts and supported Alphabet's rerating.
- Google Cloud growth, with 34% Q3 2025 revenue and a $155 billion backlog, underpinned valuation.
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Alphabet valuation (GOOG, GOOGL) climbed on January 12, 2026, following AI optimism and reports that Apple plans to base new Apple Intelligence features on Google's Gemini models. This development coincided with stronger Google Cloud performance and boosted the company’s market standing.
Valuation Milestone and Market Position
Alphabet’s market capitalization reached $4 trillion, making it the fourth company to hit that mark after Nvidia, Microsoft, and Apple. The milestone moved Alphabet ahead of Apple for the first time since 2019, leaving only Nvidia larger among global peers. The stock rose 65% in 2025 and extended gains early in 2026, setting the stage for a revaluation among large-cap technology companies.
Advertising remained Alphabet’s primary revenue source despite broader economic uncertainty. In September 2025, a U.S. judge rejected a call to break up Alphabet, preserving the company’s control of the Chrome browser and Android operating system and removing a major legal overhang from strategic discussions.
AI and Cloud Growth Drive Reassessment
Google Cloud revenue rose 34% in the third quarter of 2025, supported by an unrecognized-contract backlog of $155 billion, reflecting strong contracted demand. The unit’s market share increased to 25.5% in the second quarter of 2025 from about 19.1% in early 2022, signaling steady gains in enterprise infrastructure markets.
Alphabet launched Gemini 3, its latest foundation AI model, to broadly positive reviews. The model was cited as exerting competitive pressure on rivals such as OpenAI’s GPT-5. Reports said Apple and Google entered a multi-year collaboration under which Apple’s next-generation Foundation Models will be based on Gemini and Google Cloud technology. These models will power future Apple Intelligence features, including a more personalized Siri expected this year.
The combination of Google Cloud’s growth, the reception to Gemini 3, and the reported Apple collaboration narrowed strategic doubts about Alphabet’s direction. This mix of improved enterprise traction and new AI partnerships underpinned the valuation milestone and the company’s rerating among major tech peers.
