Alphabet (GOOGL) Stock Hits All-Time High as Gemini Steals Share From ChatGPT

TLDR

• Alphabet shares surged 70% over 12 months to reach record highs near $300 per share
• Third-quarter pretax profit jumped 39% while margins expanded seven percentage points despite higher spending
• Google Cloud revenue grew 34% year-over-year, faster than Microsoft and Amazon’s cloud divisions
• Berkshire Hathaway purchased $4.34 billion in Alphabet stock, signaling confidence in the company
• Gemini AI grabbed market share from ChatGPT, growing from 5.6% to 13.7% of generative AI traffic

Alphabet stock closed at $299.66 on Friday, hitting a new all-time high. The shares have rallied almost 70% over the past year.

Alphabet Inc., GOOGL

Twelve months ago, investors worried about the company’s future. A federal judge had ruled Google a monopolist. ChatGPT’s rapid growth raised questions about search’s survival.

The stock traded at just 20 times forward earnings. That was the cheapest valuation among Magnificent Seven stocks.

Those fears didn’t pan out. Proposed antitrust penalties came in lighter than expected. Google proved it could compete in AI with four straight earnings beats.

Shares now trade at 26 times earnings. Half the gain came from valuation expansion. The other half came from earnings growth.

Warren Buffett’s Berkshire Hathaway bought $4.34 billion worth of Alphabet shares. The stock has become 2025’s best-performing Magnificent Seven name with a 59% year-to-date gain.

Profits Grow Despite Heavy Spending

Third-quarter pretax profit grew 39% year-over-year. Profit margins expanded by seven percentage points. The company achieved this while boosting capital spending from $13 billion to $24 billion.

Meta Platforms saw different results. Its profit margins fell two percentage points as spending more than doubled to $19 billion.

Google Search revenue grew 15% year-over-year. The segment generates roughly 55% of total revenue. Predictions about AI killing search haven’t come true.

Analysts expect 2025 earnings above $10 per share. That’s up from $9 projected last year. Wall Street sees 2026 earnings reaching $12 to $13 per share.

Cloud Business Leads Growth

Google Cloud Platform ranks third globally with 13% market share. Amazon AWS leads at 29%, followed by Microsoft Azure at 20%.

Google Cloud revenue jumped 34% in the third quarter. That beat Microsoft’s 33% growth and Amazon’s 20% increase.

Analysts project Google Cloud will hit $75 billion in 2026 revenue. That’s up from approximately $57 billion in 2025.

The November 18 launch of Gemini 3 showed Google’s competitive strength. The new model features Deep Think for complex problems. It includes better coding tools and generative interfaces.

Gemini reached 650 million monthly active users. ChatGPT reports 800 million weekly active users. Gemini’s share of AI web traffic climbed to 13.7% from 5.6% one year ago.

Analyst Views and Price Targets

Oakmark Funds manager Bill Nygren says the stock remains fairly valued. “The stock going from $160 to over $300 has made it look less attractive, but [Alphabet is] still not selling for more than we think it’s worth,” he stated.

Evercore analyst Mark Mahaney holds a $325 price target. He notes the fundamentals and innovation level remain impressive.

The average analyst price target sits at $321.94. That implies 7% upside from current levels.

The 14-day relative strength index shows overbought conditions. A pullback could send shares back to $290 support.

CEO Sundar Pichai said Waymo is positioned for strong growth. The self-driving unit faces an exciting 2026 ahead.

Capital expenditures reached $24 billion in the third quarter. The company continues investing heavily in AI infrastructure and development.

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