Current Trends and Performance Metrics for Alphabet (GOOGL)
1. Stock Price and Performance
Alphabet's stock GOOGL closed at $325.44 on January 8, 2026, with a daily change of +1.07%. The stock has a 52-week high of $330.32 and a 52-week low of $140.14. In 2025, GOOGL was the best-performing "Magnificent 7" stock, with gains of nearly 65%. Its market capitalization reached $3.88 trillion in the first week of 2026, surpassing Apple's for the first time since 2019. This strong performance is attributed to growing investor confidence in its AI leadership and aggressive push into artificial intelligence.
2. AI Leadership and Momentum
Alphabet is experiencing a fresh wave of optimism due to its AI leadership, rapid adoption of Gemini, and expanding roles for Google Cloud, Waymo, and quantum computing partnerships. The company has been actively embedding AI into its Search business to enhance user experience, provide better AI-focused features, and improve ad performance. AI Overviews and AI Mode are driving overall and commercial queries, leading to monetization opportunities.
Alphabet's AI efforts extend to:
Gemini Platform: Gemini 3, its latest reasoning model, now powers Search via AI Mode and is considered a best-in-class large language model. Gemini 3's release led to a slowdown in ChatGPT traffic, reinforcing Alphabet's regaining share in the AI ecosystem. The Gemini app has over 650 million monthly active users.
Custom AI Chips (TPUs): Alphabet has developed its own Tensor Processing Units (TPUs) to power AI bots and accelerate machine learning tasks. These TPUs are a core component of Google’s AI Hypercompute system and are available via Google Cloud. There is strong demand for Alphabet's custom TPUs from external companies, with Anthropic planning to use them for some of its workload, and Meta Platforms reportedly in discussions to purchase them.
Vertical Integration: Alphabet adopts a full-stack approach to AI, designing its own custom ASICs for neural networks and integrating AI into its expansive technology platform. This vertical integration provides a structural cost advantage.
Google Cloud: Over 70% of Google Cloud customers are already using Alphabet's AI products, making AI usage a key growth catalyst. Google Cloud's revenue growth was over 30% in Q3 2025, supporting its market dominance in generative AI solutions.
Other AI-powered Businesses: Alphabet's self-driving car subsidiary, Waymo, is expanding its driverless ride-share business. It completed 14 million trips in 2025 and is on track to complete 1 million rides per week by the end of 2026.
3. Financial Performance
Alphabet's revenue grew 16% year over year to $102.3 billion in Q3 2025, and net income climbed 33% to about $35 billion. For 2025, Alphabet's shares rose 66.5%, with revenue up 10.2% and net income rising 24.1% year over year. The Zacks Consensus Estimate for 2025 earnings is $10.58 per share (up 31.6% year-over-year) on revenues of $340.26 billion (up 15.3% year-over-year). For 2026, earnings are estimated at $11.04 per share (up 4.34% from 2025) on revenues of $390.18 billion (up 14.7% from 2025). The company maintains a strong financial position with $98.5 billion in cash and marketable securities and low debt.
4. Valuation
Alphabet's forward Price-to-Earnings (P/E) ratio is around 28, which is considered reasonable given its long-term upside in AI and quantum computing. The stock trades at 31 times earnings, matching the S&P 500 average and making it the second-cheapest "Magnificent Seven" stock by this metric. Some analysts peg Alphabet's fair value at US$340, suggesting it is currently undervalued. However, other models estimate its fair value closer to its current price, around $312.02.
5. Risks and Challenges
Despite the bullish outlook, Alphabet faces rising capital intensity and regulatory scrutiny. High costs associated with generative AI could potentially cap profitability and justify a lower fair value. Capacity constraints and higher depreciation expenses for data centers, including energy costs, are expected to hurt profitability, as are increased sales and marketing expenses. Regulatory and legal scrutiny over Google's collection and use of content for its AI models also remains a key risk.
6. Comparison with Nvidia in AI Race
Alphabet is investing aggressively in AI, with capital expenditures exceeding $90 billion in 2025 and expected to increase further in 2026. Alphabet is seen as a diversified player in the AI revolution, positioning itself to emerge as a durable leader by vertically integrating all aspects of the AI value chain across its ecosystem.
While Nvidia is considered the leader in high-performance GPUs and AI accelerators, Alphabet's custom TPUs are gaining momentum as a cost-efficient alternative to Nvidia GPUs for AI training and inference. Some analysts suggest that Nvidia should be concerned about Alphabet's $900 billion project around Tensor Processing Unit chips. Nvidia acknowledges competition from Google in the processor market and faces the possibility that customers like Alphabet will rely more heavily on their in-house designed chips.
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