Google CEO Sundar Pichai greets as he arrives at the Artificial Intelligence Action Summit at the Grand Palais in Paris, February 11, 2025.
Benoît Tessier | Reuters
After a difficult start to the year, Google closes 2025 with its best performance — from a Wall Street perspective — since 2009, when the company’s shares doubled in the wake of the financial crisis.
The alphabet the stock has surged 65% for the year, slightly ahead of its 2021 gains. Shares hit their 2025 low in April, as President Donald Trump threatened to impose massive tariffs on its trading partners, but these have since jumped by more than 100%.
Of the eight tech companies valued at more than $1 trillion, Alphabet was by far the biggest winner. The next biggest rebounds came from chipmakers Broadcom And Nvidiawho gained 49% and 39% respectively.
Alphabet vs. Nasdaq in 2025
To get to this point, Google had to confront skeptics, who wondered whether the search giant could maintain its dominance in the age of artificial intelligence. With OpenAI With ChatGPT and Sora services capturing growing consumer engagement and concerns swirling around the future of online advertising in a world of chatbots and AI agents, Google’s business model was seen as a target for major disruption.
Alphabet’s 18% fall in the first quarter was the worst period for the stock since mid-2022.
But the mood started to improve in the second quarter. In April, the company promoted a 16-year company veteran Josh Woodward to run the Gemini app, Google’s answer to ChatGPT.
In August, Woodward’s group launched the Nano Banana Image Generator, a Gemini feature that lets users turn to AI to generate images. The feature went viral at launch when people used it to blend multiple photos to create personal digital figurines. By the end of the following month, the Gemini application exceeded 5 billion images and fallen OpenAI ChatGPT at the top of Apple App store.
Google’s AI talent pool expanded over the summer, when the company announced a agreement to bring in Varun Mohan, co-founder and CEO of AI coding startup Windsurf, as well as other senior research and development employees of the high-profile startup who had previously worked in talks with OpenAI for a $3 billion acquisition. That deal fell through, and Google ended up agreeing to pay $2.4 billion in licensing fees and compensation to recruit Windsurf’s top engineers.
Winning in AI and in court
Shortly after, Google received a gift in the courtroom.
Despite losing its antitrust case last year because Google had an illegal monopoly in Internet search, U.S. District Judge Amit Mehta ruled in September against the most severe consequences proposed by the Ministry of Justice.
Google wouldn’t have to divest Chrome and could still make payments to companies to preload products, meaning it could keep paying Apple billions of dollars to be the default search engine on iPhones. One of the consequences of this decision is that Google would have to share certain data with its competitors.
The Gemini momentum was the biggest story.
Last month, Google announced Gemini 3an improved AI model, almost eight months after the deployment of Gemini 2.5.
Although Gemini still lags behind ChatGPT in overall usage, it has quickly caught up. According to this month’s data from Similar websiteChatGPT’s share of generative AI traffic fell to about 68% from 87% a year earlier, while Gemini jumped to about 18% from about 5% during that period.
Citizens analysts wrote in a Tuesday report that the critical development for Alphabet involves not just Gemini but the effect of the company’s AI investments on the core search business.
AI Overviews is Google’s integrated search service that provides AI-powered summaries for user queries. Citizens analysts said that “incorporating updated templates improves the relevance of responses, which we see as an additional driver of engagement.”
“We are confident that Google can further accelerate search revenue in 4Q25, which we view as the key issue in the near term,” wrote the analysts, who recommend buying the shares even after the latest rebound.
Analysts also highlighted Google’s great strength in cloud computing, where the company continues Amazon Web Services and Microsoft Azure and the company’s leadership in robotaxis via Waymo as potential catalysts by 2026.
Yet with investors flocking to the stock, expectations are sky-high. Analysts expect revenue growth of 15% in the fourth quarter, reaching more than $111 billion when Alphabet reports its next results, according to LSEG, and growth throughout next year is expected to be around 15%.
In October, Alphabet raised its capital spending forecast for 2025 could reach $93 billion, up from $85 billion. Analysts predict that figure will climb to more than $114 billion in 2026, according to FactSet.
CEO Sundar Pichai has repeatedly stated that the company is responding to growing demand. He said during the October earnings conference call that Google’s cloud business signed more deals over $1 billion in 2025 in the third quarter than in the previous two years combined.
Analysts at Pivotal Research warned in a note to clients earlier this month that if OpenAI, one of Google’s major clients, cuts spending or faces other problems because of its growing obligations, “it could temporarily get pretty ugly for AI stocks and the market in general.”
But Pivotal analysts have a buy rating on the stock and raised their price target by $50, to $400, or about 28% above Wednesday’s closing price of $313.
“We believe the shake-up, if it occurs, will resemble that of 2000 and will inevitably be a healthy process of elimination, leaving fewer and much more dominant competitors, with GOOG leading the way,” they wrote.
— CNBC’s Jennifer Elias contributed to this report.
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