Google wraps up best year on Wall Street since 2009, beating megacap peers as AI story strengthens

After a rocky start to the year, Google has concluded 2025 with its best Wall Street performance since 2009, when its stock doubled following the financial crisis. Alphabet’s shares soared by 65%, surpassing its gains from 2021. The company faced a challenging April, dipping to its lowest value of the year amid looming tariff threats from then-President Donald Trump, but has since rallied impressively, more than doubling its stock value. Among the eight tech giants valued over $1 trillion, Alphabet emerged as the standout performer. In comparison, chipmakers Broadcom and Nvidia saw gains of 49% and 39%, respectively. This remarkable turnaround came despite skepticism about Google's ability to retain its market dominance in an era increasingly defined by artificial intelligence. The rise of AI models like OpenAI's ChatGPT and Sora raised concerns regarding the future of Google's business model, particularly in online advertising. After experiencing an 18% decline in stock value during the first quarter—the company's worst performance since mid-2022—sentiment began to shift positively in the second quarter. A pivotal moment occurred in April when Josh Woodward, a seasoned 16-year veteran, was appointed to lead the Gemini app, Google's competitive response to ChatGPT. Gemini made headlines in August with the launch of its image generator feature, Nano Banana, allowing users to create customized digital figurines. This feature quickly gained popularity, contributing to the app surpassing 5 billion images generated and overtaking ChatGPT in the Apple App Store rankings. In a strategic move to enhance its AI capabilities, Google also announced a significant partnership with Windsurf, an AI coding startup, bringing in key personnel after a previously proposed acquisition fell through. This agreement will see Google invest $2.4 billion to secure top talent in the AI field. A recent court ruling also favored Google, as U.S. District Judge Amit Mehta decided against imposing severe penalties following an antitrust case that found the company holding an illegal monopoly in internet search. Although Google must now share certain data with its competitors, it can continue its financial arrangements to remain the default search engine on iPhones. The unveiling of Gemini 3 last month marked another milestone, coming just eight months after Gemini 2.5. Although Gemini is still behind ChatGPT in overall usage, its market share has significantly increased. Recent data shows ChatGPT's generative AI traffic share has decreased from 87% to about 68%, while Gemini's share has jumped from 5% to roughly 18%. Analysts at Citizens believe that Google’s AI advancements are not only crucial for Gemini but also for enhancing its core search business. The introduction of AI Overviews, which provide AI-generated summaries for search queries, is expected to improve user engagement. Looking ahead, analysts anticipate a 15% growth in revenue for the fourth quarter, estimating Alphabet’s earnings to exceed $111 billion. This optimism is reflected in Alphabet's recently raised capital spending forecast for 2025, now projected to reach $93 billion. As CEO Sundar Pichai noted, the company is responding to an unprecedented demand for its cloud services, having signed more billion-dollar deals in 2025 than in the previous two years combined. Despite potential challenges from major clients like OpenAI, which could impact the broader AI sector, many analysts maintain a buy rating on Alphabet's stock, projecting a price target increase to $400, indicating confidence in Google's leading position in the competitive landscape ahead.