Alphabet's 160% yearly surge highlights value of dominating AI technologies

Alphabet briefly surpassed NVIDIA in market capitalisation during after-hours trading this week, underscoring Wall Street’s growing confidence in the company’s artificial intelligence strategy.

Shares of Alphabet have climbed about 160% over the past year, driven by strong demand for its AI products, expanding cloud business and growing adoption of its custom tensor processing units, or TPUs.

The company ended the week with a market value of approximately $4.8 trillion, just behind NVIDIA’s $5.2 trillion.

Investor enthusiasm accelerated after reports that Anthropic committed to spending $200 billion on Google Cloud over five years to secure large-scale computing capacity.

Analysts say Alphabet now has a unique advantage because it controls nearly every layer of the AI stack, from chips and infrastructure to large language models and consumer distribution through products such as Search, YouTube and Android.

JPMorgan recently named Alphabet its top technology stock, citing rapid cloud growth and a backlog that nearly doubled to $462 billion.

Mizuho Financial Group also raised its price target, arguing that analysts are underestimating future profits from Google Cloud and TPU sales.

Some analysts, however, have warned about customer concentration risk, noting that a significant portion of Google Cloud’s backlog may be tied to Anthropic.

Despite those concerns, many investors view Alphabet’s combination of AI research, cloud infrastructure and custom chips as positioning the company to remain one of the dominant players in the global AI race.