Alphabet is emerging as a key contender in the artificial intelligence race, with Wall Street increasingly viewing the Google parent as an AI leader, a sharp reversal from last year when investors believed the company was lagging behind rivals. The shift in sentiment followed the release of Alphabet’s Gemini 3 model and a more confident tone from executives during the company’s latest earnings call.
Chief executive Sundar Pichai said AI investments are now driving revenue growth across both consumer and enterprise businesses, supporting Alphabet’s plan to significantly raise capital expenditure in 2026 to expand AI computing capacity. The Gemini app surpassed 750 million monthly active users in the December quarter, while enterprise adoption reached 8 million paid licences, though usage still trails OpenAI’s ChatGPT.
Investor confidence was reinforced by strong growth in Google Cloud, where revenue rose 48 per cent in the quarter, helping Alphabet’s shares recover from an initial post-earnings dip. Analysts say the market is increasingly favouring Alphabet over firms more closely tied to OpenAI, amid concerns about the sustainability of large AI spending and long-term returns.