Alphabet, the parent company of Google, hit a market capitalization of $3 trillion for the first time on Monday, driven by renewed investor optimism around artificial intelligence and a favorable US antitrust ruling. Class A shares rose 3.8% to $250, while Class C shares climbed 3.7% to $250.4, both reaching record highs.
Including Monday’s gains, Alphabet’s stock has surged over 32% so far in 2025, outperforming the S&P 500’s 12.5% gain and making it the top performer among the so-called “Magnificent 7” tech stocks. The milestone places Alphabet alongside Apple and Microsoft, while AI chipmaker Nvidia leads with a $4.25 trillion valuation.
Tech Stocks Lead the Rally
The broader technology and AI-linked sector has fueled Wall Street’s rally, amid expectations of a potential Federal Reserve interest rate cut later this week. Oracle’s strong forecast last week further boosted AI-related stocks.
Kim Forrest, chief investment officer at Bokeh Capital Partners, said, “Tech stocks have been the leaders of the recent rally and there has been no other (sector) in the past 18 months, maybe even two years that has had such excitement from investors.” The communications services sub-sector, which includes Alphabet, has jumped more than 26% this year, making it the best-performing sector among 11 major sub-indexes, with information technology in second place.
Antitrust Ruling Boosts Investor Confidence
Investor sentiment received a lift after a U.S. court recently allowed Alphabet to retain control of its Chrome browser and Android mobile operating system, a pivotal decision for the company long scrutinized for its dominance in search and mobile ecosystems. While sharing some data will benefit advertising rivals, not having to divest Chrome or Android alleviates a major investor concern.
In July, Alphabet’s cloud-computing unit posted a nearly 32% jump in Q2 revenue, surpassing expectations as investments in in-house chips and the Gemini AI model began yielding results. Dennis Dick, chief strategist at Stock Trader Network, said, “They still are very dependent on search, but with YouTube, Waymo, and other capabilities and products they’re working on, investors are starting to see that possibility that this isn’t just a search company anymore, this is a company that’s moving into a lot of other things.”
Alphabet currently trades at roughly 23 times forward earnings, slightly above its five-year average of 22, but remains the lowest among the “Magnificent 7.”
