Alphabet (NASDAQ: GOOGL) is making waves in 2025, outpacing the broader market and even surpassing its Magnificent Seven group and its key AI challengers.
But it wasn’t always smooth sailing. Earlier this year, Alphabet’s shares were held back due to worries about stiff competition in the AI arena, regulatory issues, and some uneven market performance.
However, in the last few months, a major turnaround has taken place for this tech giant.
Investor sentiment has shifted dramatically from caution to robust confidence, establishing Alphabet as a leading contender in the hottest phase of AI adoption.
This positive change isn’t based on mere hype—it’s about effective execution.
Breakthroughs in Google’s AI, substantial growth across various sectors, and an unexpected boost from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) have caught the attention of even the biggest skeptics.
With the stock having surged 70% year-to-date (YTD) and 130% from its lowest point in the last year, investors are left speculating about its future trajectory.
Gemini 3: Google’s New AI Powerhouse
On November 18, Google dropped Gemini 3, its latest AI model, and the immediate market reaction was telling. Companies like NVIDIA (NASDAQ: NVDA) experienced stock declines soon after, down over 7% that month, while GOOGL saw a spike in positive sentiment.
A slew of analyst upgrades followed, praising Gemini 3 for excelling in benchmarks related to mathematics, coding, science, and multimodal reasoning.
A standout revelation was that Gemini 3 primarily utilized Google’s own TPU chips, rather than NVIDIA’s GPUs. This insight led to significant market reactions, with analysts noting that Google’s self-sufficiency gives it an crucial edge in both pricing and scalability. Even NVIDIA congratulated Google, acknowledging the moment while subtly reinforcing its own relevance.
Silicon Valley sounded off positively on Gemini 3. Marcus Benioff, CEO of Salesforce, remarked after testing the model, “It feels like the world just changed, again.” Many analysts on Wall Street echoed the sentiment, recognizing Google as the company with the clearest lead in foundational AI technology.
Could Google’s TPUs Gain Traction Outside of Cloud?
Another interesting direction for Google is the potential for its TPUs to step outside their current cloud-focused role. Reports suggest Google is exploring offers for its next-gen TPUs to be used directly in customer data centers, marking a clear shift from its prior exclusive cloud strategy.
One potential collaborator is Meta Platforms (NASDAQ: META), which is said to be in talks about a multibillion-dollar plan to implement TPUs at its data centers by 2027 and may also rent TPU capacity in the near future.
Before Gemini 3, Alphabet Was Already Accelerating
Ahead of their latest AI breakthrough, Alphabet was experiencing excellent performance—BUrkh the big news came when Berkshire Hathaway revealed its investment in Alphabet, surprising the market. It wasn’t unexpected that Buffett favors a tech stock, having Apple on his roster, but choosing Alphabet at a time when its shares were already climbing prompted significant market interest.
The company recently reported hitting its first $100 billion quarterly revenue milestone, showing great growth in Search, YouTube, Cloud, and subscriptions. Google Cloud continues to gain profitability, ad revenue is on the rise, and management emphasized improvements across the board. Such a turnaround for a giant like Alphabet is uncommon, and it elevates speculation that the stock might still be in the beginning phases of a long-term rise.
Alphabet is Leading in the AI Race
Today, momentum is undoubtedly on Alphabet’s side. With Gemini 3 reinforcing its lead in AI, TPUs emerging as serious contenders in hardware discussions, and sustained growth across all business aspects alongside Buffett’s endorsement, the prospects look bright. As we head into 2026, it seems improbable for this momentum to wane. Alphabet isn’t just a participant in the AI market—it’s defining the pace.
