Shares of the Google parent jumped more than 5 percent on Monday to $315.9, pushing its market capitalization to $3.82 trillion. The stock has surged nearly 70 percent this year, far outpacing key AI rivals such as Microsoft and Amazon. Only Nvidia and Apple currently sit above the $4 trillion threshold, though Microsoft briefly crossed it earlier. Nvidia has since climbed past $5 trillion, marking a milestone that has transformed the hierarchy of the tech world.
The dramatic rebound in Alphabet’s fortunes represents a sharp reversal from the anxiety sparked in 2022 when the launch of ChatGPT led investors to fear Google had lost its AI edge despite having pioneered much of the underlying technology. Momentum returned rapidly this year as Alphabet’s cloud division emerged as a major engine of growth, drawing investment from Berkshire Hathaway, and its latest Gemini 3 model earned strong initial reviews.
But the skyrocketing valuation has also heightened concerns among executives and analysts that a tech bubble may be inflating. Some warn that investors have detached valuations from business fundamentals, echoing the speculative fever of the late-1990s dot-com era. Those fears have been amplified by increasingly complex and circular financial arrangements involving OpenAI and Nvidia, two central players in the AI boom. Even so, analysts note that Alphabet’s deep cash reserves, in-house chip production that reduces reliance on Nvidia’s costly processors, and its vast search empire — which is already benefiting from AI upgrades — leave it well positioned in the escalating competition.
Alphabet’s surging valuation came as global investors focused intensely on earnings results from Microsoft, Alphabet and Meta, a trio worth nearly $10 trillion combined. Google delivered the strongest performance, beating profit expectations by 26 percent with earnings of $2.87 per share and surpassing $100 billion in quarterly revenue for the first time. Revenue rose 16 percent year-over-year, with Google Search and YouTube Ads each climbing 15 percent. Google Cloud led with 34 percent growth, while Google Network slipped 3 percent. EBIT rose nearly 10 percent, and earnings per share jumped 35 percent.
Against this backdrop of remarkable growth, Alphabet chief executive Sundar Pichai offered a measured warning in an exclusive interview with the BBC. He cautioned that every major company, including his own, would be vulnerable if the AI bubble were to burst. While calling the current investment surge an extraordinary moment, Pichai said elements of irrationality have crept into the boom. His remarks echoed former Federal Reserve chair Alan Greenspan’s caution over “irrational exuberance” during the dot-com years and followed a similar warning from JPMorgan chief Jamie Dimon that some AI investments will “probably be lost.”
Speaking at Google’s California headquarters, Pichai argued that technology cycles often overshoot before stabilising, drawing parallels with the early internet era. He noted that Alphabet’s shares have doubled in seven months to $3.5 trillion as confidence rises in its ability to counter OpenAI and compete with Nvidia, led by Jensen Huang, whose company has reached an unprecedented $5 trillion valuation. Pichai insisted Alphabet’s “full stack” approach — spanning chips, models, cloud infrastructure and global search — gives it a stronger foundation to withstand volatility even as scrutiny over the sustainability of AI valuations intensifies.
