Alphabet, the parent company of Google, crossed a market capitalisation of $3 trillion for the first time on Monday, propelled by surging investor optimism around artificial intelligence and relief from a favourable antitrust ruling in the United States.
Shares of Alphabet’s Class A stock closed up 3.8 per cent at $250, while Class C shares rose 3.7 per cent to $250.40 — both at record highs. The rally has lifted Alphabet more than 32 per cent since the start of 2025, outstripping the S&P 500’s 12.5 per cent gain and making it the strongest performer among the so-called “Magnificent Seven” technology stocks, Reuters reported.
Alphabet joins the $3 trillion club
Alphabet’s milestone places it in a rarefied group of American technology giants. Microsoft and Apple had already touched the $3 trillion valuation, while Nvidia recently surged to become the world’s most valuable company at $4.25 trillion, fuelled by demand for its AI chips.
The rally comes as technology and AI-linked stocks continue to push Wall Street’s main indexes to new highs. Anticipation of a potential Federal Reserve interest rate cut this week has added further fuel to the market’s momentum. Oracle’s upbeat earnings forecast last week reinforced investor enthusiasm for AI-linked businesses.
Kim Forrest, chief investment officer at Bokeh Capital Partners, told Reuters that no other sector in the past two years has captured investor imagination like technology. “Tech stocks have been the leaders of the recent rally and there has been no other sector that has had such excitement from investors,” she said.
Alphabet’s surge has also been underpinned by an important legal victory. Earlier this month, a US court allowed the company to retain control of its Chrome web browser and Android mobile operating system. Regulators had long scrutinised both products as potential monopolies.
The decision means Alphabet will need to share data to strengthen competitors in advertising, but it avoided a far more damaging outcome — divesting control of its most critical consumer platforms. For investors, that resolution removed a looming threat to Alphabet’s dominance in search and mobile ecosystems.
Cloud and AI momentum
Alphabet’s growth story is increasingly tied to its AI strategy. In July, its cloud-computing arm reported a 32 per cent jump in second-quarter revenue, beating expectations as investments in proprietary chips and its Gemini AI model began to deliver returns.
The company is still heavily reliant on advertising, but investors are paying attention to its broader portfolio. Dennis Dick, chief strategist at Stock Trader Network, told Reuters: “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 this isn’t just a search company anymore.”
Alphabet’s push into generative AI has accelerated competition with Microsoft and OpenAI, particularly around large language models. Analysts have said the Gemini rollout, coupled with in-house hardware development, has strengthened Alphabet’s position in the high-stakes race for AI leadership.
Valuation and outlook
Alphabet trades at around 23 times its forward earnings, according to data from LSEG. That multiple is below its own five-year average of 22 and remains the lowest among the Magnificent Seven, giving some analysts scope to argue the stock still has room to run despite its sharp gains this year.
The communications services sub-sector, which includes Alphabet, has climbed more than 26 per cent so far in 2025, the strongest performer among the 11 major S&P sub-indexes. Information technology ranks second.
For Alphabet, the next stage will test whether its AI strategy can continue to deliver results across cloud, search, and its newer bets such as autonomous driving. Investors, buoyed by the $3 trillion milestone, are watching closely for signs that the company can sustain momentum in the face of rising competition and regulatory scrutiny.
Alphabet’s ascent underscores a broader trend: the centre of gravity in markets is shifting further towards technology. With Nvidia, Microsoft, Apple, and now Google’s parent all commanding multi-trillion-dollar valuations, Wall Street’s future appears tethered more tightly than ever to the promise — and risks — of artificial intelligence.