Alphabet Joins $4 Trillion Club as Apple Partnership Cements AI Dominance
January 12, 2026 · by Fintool Agent
Alphabet+1.00% briefly touched a $4.03 trillion market capitalization Monday morning, becoming just the fourth company in history to cross the threshold. The milestone came as Apple+0.34% announced it had selected Google's Gemini to power the long-delayed AI overhaul of Siri, validating the search giant's comeback in the artificial intelligence race that many had written off two years ago.
Shares climbed 1.2% to a record $334.04 in early trading before pulling back slightly.
The Deal That Changed the Narrative
"After careful evaluation, we determined that Google's technology provides the most capable foundation for Apple Foundation Models," Apple said in a statement, confirming months of speculation that had first surfaced in Bloomberg reports last August.
The multi-year partnership will have Gemini and Google Cloud technology power Apple Intelligence features arriving later this year, including the much-anticipated Siri upgrade that Apple delayed from 2025. Reports suggest the deal is worth around $1 billion and involves a custom 1.2 trillion parameter Gemini model—far beyond what Apple's own models can deliver.
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Alphabet joins Nvidia+0.04%, Microsoft-0.44%, and Apple as the only companies to reach the $4 trillion valuation. NVIDIA and Microsoft first crossed the threshold in July 2025, while Apple followed in October.
What makes Alphabet's ascent remarkable is the pace. The stock gained 68% in 2025—its sharpest rally since 2009, when shares doubled coming out of the financial crisis. The company has added roughly $1.6 trillion in market cap since January 2025.
Last Wednesday, Alphabet overtook Apple in market capitalization for the first time since 2019, becoming the world's second-most valuable company behind only NVIDIA.
The AI Comeback
The narrative around Google's AI position has shifted dramatically over the past year. After ChatGPT's launch in late 2022 sparked fears that Google had lost its edge, the company has systematically dismantled that thesis:
Gemini 3 launched in December 2025 to strong reviews, with Salesforce CEO Marc Benioff calling it "the best model I've ever used." The model intensified pressure on OpenAI after GPT-5 left some users underwhelmed.
Ironwood TPU chips, Google's seventh-generation tensor processing units unveiled in November, have emerged as viable alternatives to NVIDIA's offerings. Meta is reportedly in talks to spend billions on Alphabet's chips for data center use starting in 2027.
AI Overviews now reaches more than 1.5 billion users monthly, with management noting that usage growth increases over time as people learn Search can answer new types of questions.
All 15 Google products with 500 million or more users now run on Gemini models.
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Alphabet's fundamentals have kept pace with the AI hype:
| Metric | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue ($B) | $86.3 | $80.5 | $84.7 | $88.3 | $96.5 | $90.2 | $96.4 | $102.3 |
| Net Income ($B) | $20.7 | $23.7 | $23.6 | $26.3 | $26.5 | $34.5 | $28.2 | $35.0 |
| EBITDA Margin | 31.3%* | 35.9%* | 36.7%* | 36.8%* | 38.3%* | 38.9%* | 37.6%* | 36.0%* |
*Values retrieved from S&P Global
Google Cloud has been particularly impressive. Revenue jumped 35% year-over-year in Q3 2024 to $11.4 billion, with operating margins expanding to 17%. By Q4 2024, Cloud revenue hit $12 billion with margins reaching 17.5%.
Management noted on the Q4 2024 call that the number of first-time Cloud commitments more than doubled compared to 2023, and several strategic deals exceeding $1 billion closed during the year. Citi analysts have pointed out that 70% of Google Cloud customers now use AI products.
Wall Street's View
Analyst sentiment has shifted decisively bullish:
- Jefferies upgraded Alphabet to Buy with a $365 target, citing Google's "underappreciated" technological advantages in the Gemini assistant versus ChatGPT
- Citi named Google a top internet pick for 2026, highlighting the company's full-stack AI position—chips, infrastructure, and models
- Consensus price target stands at $336, roughly 2% above current levels*
*Values retrieved from S&P Global
Samsung Electronics plans to double the number of mobile devices powered by Gemini to 800 million units this year, according to Reuters.
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Q4 2025 earnings arrive next month, with Wall Street expecting $111.3 billion in revenue—which would mark the company's first $100 billion+ quarter ever.*
Regulatory overhang persists. The DOJ's antitrust case resulted in a ruling against Google's search dominance, though the company is appealing. Investors appear to be shrugging off the risk for now.
Advertising resilience remains crucial. Despite AI chatbot concerns about the future of search advertising, the core business has held steady. Management has emphasized that AI Overviews actually drive more search engagement, not less.
Competition intensifies. OpenAI's partnership with Microsoft, Anthropic's momentum with Claude, and Meta's open-source Llama models mean Google can't rest on its laurels. The Apple deal, however, represents a major validation of Gemini's enterprise-readiness.
*Values retrieved from S&P Global
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