The announcement coincided with Alphabet’s report of fourth-quarter revenue of $113.8 billion, up 18% year-on-year and slightly above Wall Street’s forecast of $111.3 billion. Net income rose 30% to $34.5 billion, surpassing expectations of $31.9 billion. Shares fell 1.4% in after-hours trading to $328.88.
Alphabet, led by CEO Sundar Pichai, has emerged as a key player in AI, developing its Gemini AI model and custom chips, and successfully integrating AI features into search and consumer applications. The Gemini AI assistant app reached over 650 million monthly users in November 2025, while the AI Overviews feature in Google Search surpassed 2 billion monthly users.
The company also recently partnered with Apple to power the revamped Siri voice assistant with Gemini AI models, opening access to Apple’s 2.5 billion-device ecosystem. Analysts see this as a significant growth opportunity for Google, complementing its resilient search advertising and YouTube revenue streams.
Alphabet’s market capitalisation now exceeds $4 trillion, approaching Nvidia’s $4.3 trillion valuation. The company outperformed other leading US tech firms last year, gaining over 64%, and has continued to lead the group with a 6% rise so far in 2026.
While Alphabet accelerates AI investment, broader tech stocks have faced volatility. Microsoft reported slowing cloud growth, and chipmaker AMD warned of increased competition, causing share sell-offs in related sectors. Analysts note that while AI adoption is unprecedented, market uncertainty over tech valuations persists.
