Alphabet has recently closed in on a $4 trillion valuation on Monday, set to become only the fourth company to enter the exclusive club.
Primarily optimism around its AI capabilities has propelled its market capitalization.
Meanwhile, the company’s shares hit a significant record high of $315.9 and rose more than 5%.
The stock has climbed nearly 70% so far this year, surpassing AI rivals Microsoft and Amazon.
The turnabout in sentiment toward Alphabet, which happened after some investors had apprehended the company lost its AI edge to OpenAI following the 2022 launch of ChatGPT, was driven by its recent stock surge.
It has been observed that Alphabet has accelerated this year by turning its cloud business into a key growth driver, drawing in Warren Buffett’s Berkshire Hathaway as an investor and winning successful reviews for its new Gemini 3 model.
In this connection, chief market analyst Sosnick at Interactive Brokers said Berkshire's stake has been a crucial highlight for investors.
He further explained, “Even though it's doubtful Warren Buffett had any role in this purchase as the market is still in the mindset of anything Berkshire does it is worth emulating and to be fair that's worked for a longer period of time.”
Berkshire Hathaway has recently made a substantial investment in the company, and Alphabet’s latest Gemini 3 AI model has received positive reviews.
Alphabet has reportedly averted a forced sale of its Chrome browser, though a court found its search business to be an illegal monopoly but stopped short of ordering a break.
While some business leaders have raised concerns that valuations in the AI sector are advancing more than fundamentals, and instigated troubles of a bubble similar to the dot-com boom, the AI rally continues unabated.
The recent achievements have led to significant valuations that some business leaders warn have decoupled the market’s movements from business fundamentals, sparking worries of an evocation of the unsustainable growth of the 1990s.
Circular deals comprising OpenAI and Nvidia-two of the prime companies at the heart of the AI boom-have also intensified the fears.
Nonetheless, Google has solidified its position in the AI race, with in-house chips that serve as a central processor and a dominant internet search that is benefiting from AI integration.