Alphabet Inc. is approaching a historic financial milestone as its shares continue setting unprecedented records, bringing the company within striking distance of a $4 trillion market capitalization. This remarkable rally isn’t solely powered by the company’s traditional advertising business—instead, market enthusiasm is being fueled by speculation about a massive AI chip agreement with Meta Platforms and the explosive adoption of Alphabet’s newest artificial intelligence model, Gemini 3.
Software Breakthrough Gains Rapid Traction
The recently launched Gemini 3 artificial intelligence model has emerged as a significant growth catalyst for Alphabet, with recent usage data confirming it has surpassed 650 million monthly active users. Industry leaders have expressed notable admiration for the model’s advanced capabilities.
This widespread adoption is generating substantial momentum for Alphabet’s cloud computing division. Google Cloud has reported an extraordinary 79% surge in its contract backlog, indicating that enterprise AI integration is now significantly impacting profitability while simultaneously strengthening operational margins.
Hardware Ambitions Challenge Market Leadership
Market sentiment shifted dramatically following reports that Meta Platforms is engaged in advanced negotiations to purchase billions of dollars worth of Alphabet’s proprietary AI chips, known as Tensor Processing Units (TPUs). Should this agreement materialize, it would represent a strategic pivot for Google—transforming from primarily a software powerhouse into a formidable competitor to Nvidia in the AI infrastructure sector.
Should investors sell immediately? Or is it worth buying Alphabet?
For investors, this development opens compelling possibilities: a substantial new revenue stream that would meaningfully diversify the company’s dependence on advertising markets. Alphabet would effectively monetize its internal infrastructure twice—first for powering its own services, and second as a semiconductor supplier to other technology giants.
Impressive Market Performance
Just twelve months ago, many market participants worried that Google might have fallen behind in the artificial intelligence race. Today, that perception has undergone a fundamental reassessment, reflected dramatically in the company’s stock performance. Since the beginning of the year, Alphabet shares have advanced by nearly 50%, currently trading just below yesterday’s 52-week high of €279.70.
All eyes are now fixed on the psychologically significant $4 trillion market capitalization threshold. While technical indicators like the RSI suggest short-term overbought conditions, exceptionally high trading volumes demonstrate strong conviction among institutional investors. Official confirmation of the potential partnership with Meta would likely create additional upward momentum for the stock.
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