Alphabet, the parent company of Google, soared to its highest-ever share price on Tuesday, riding the crest of the artificial intelligence (AI) wave to achieve a historic valuation.
The stock surged to an all-time intraday peak of $159.89 per share before settling at a closing price of $158.14, marking a 1.3% gain amid modest broader market losses.
This milestone propelled Alphabet’s total market value to $1.95 trillion, edging it closer to the $2 trillion mark. This elite $2 trillion club currently includes only American tech giants such as Microsoft, Apple, and Nvidia, alongside Saudi Aramco, the Saudi Arabia-controlled oil behemoth.
Alphabet’s recent ascent is underpinned by a 13% increase in its share price year-to-date and an impressive 77% leap since the end of 2022. These gains were fueled by record profits stemming from robust advertising spending and investor optimism surrounding the company’s AI potential.
Wall Street analysts anticipate Alphabet’s continued rise, with an average price target of $166 implying a $2.1 trillion market capitalization, Forbes first reported.
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What you should know
Despite Alphabet’s stellar performance, its annualized return on investment over the past decade stands at 19%, trailing its trillion-dollar peers such as Amazon, Apple, Microsoft, Meta, and Nvidia, which have achieved over 20% annualized returns. This divergence reflects market sentiment towards Alphabet’s AI offerings, though recent developments suggest improving sentiment as Google emerges as a frontrunner in generative AI.
Looking ahead, investors await Alphabet’s first-quarter earnings report later this month,  with analysts  anticipating a record Q1 profit of nearly $19 billion. This will provide a further insight into Alphabet’s trajectory and its continued evolution as a dominant force in the tech landscape, driven by its innovative AI-driven initiatives and resilient advertising revenue.
In February Google faced a $90 billion drop in market valuation, largely due to its Gemini AI service generating inaccurate racial images of historical people. Its share price fell through 4.5% at $138.75.
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About Alphabet
Alphabet Inc., an American technology conglomerate and holding company, was established in 2015 through the strategic reorganization of Google and its diverse subsidiaries. Functioning as Google’s parent entity, Alphabet embodies Larry Page and Sergey Brin’s vision for ongoing technological advancement across various domains such as healthcare, entertainment, transportation, venture capital financing, and artificial intelligence (AI).
The restructuring aimed to streamline Google’s core business operations while providing greater autonomy to other businesses under Alphabet’s umbrella.
Founders Larry Page and Sergey Brin stepped down from their executive roles in December 2019, with Sundar Pichai assuming the CEO position, overseeing both Google and Alphabet. Despite their resignations, Page and Brin remain actively involved as employees, board members, and controlling shareholders of Alphabet Inc.
