Even after slipping mildly to end the year, shares of Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) are poised to close off 2025 as the most magnificent performer of the Magnificent Seven, with gains of around 65%. Undoubtedly, it really was Alphabet’s year, with Google Gemini making massive strides in the AI race, growing its userbase at an impressive pace at the expense of the likes of ChatGPT. At the same time, Google’s AI Mode and AI Overviews have helped ease concerns that some investors may have had over AI’s potential to erode the great, wide moat of Google Search.
After a few solid quarters and continued momentum in AI capabilities, it seems like Google Search is looking virtually untouchable again. Given the sheer momentum behind Google, its AI efforts, as well as the share price, it seems unwise to stand in the way of the $3.8 trillion titan, especially as we learn more about its hardware efforts, with TPUs, which may very well give Google a big slice of the AI chip market. Indeed, AI chips could add hundreds of billions to the market cap.
Google could be in for an even bigger 2026
Only time will tell how many other big spenders it can ink deals with going into 2026. As circular dealmaking across big AI companies grows, my guess is that Google stands to gain further traction as it makes more deals that might warrant an even higher multiple on the shares.
Add the hype surrounding Waymo and the potential for 2026 to be the year when the robotaxi business enters its prime, and I find the latest retreat (it was around 8% at its worst) to be more of a breather that investors might wish to buy into than run to the hills over. Indeed, there’s no shortage of catalysts going into the new year, but the big question is whether the tech titan can continue to deliver in the face of higher expectations.
Undoubtedly, the big-name analysts have had ample opportunity to raise the bar on their price targets through the year. And just because 2025 was a big year for Alphabet does not mean analysts are expecting a reversal of course. If anything, the analyst community seems to think more of the same will be in the cards as Google looks to add to its strengths in AI. While scaling up on the hardware may still grant considerable gains, I do think that research is key to keeping the pace going strong.
It might become exponentially harder to dethrone Google Gemini
As a research-oriented firm that’s having no issues scaling up while taking full control over the entire AI stack (from TPUs all the way up to the application layer), I think Google’s AI moat might be too big to breach, especially as more investors sour over OpenAI and ChatGPT while looking to Google and Gemini as the new leaders in the large language model (LLM) wars. Undoubtedly, Google possessed many of the structural advantages to win the AI race, and in 2025, it showed everyone what it was truly capable of.
With the rumored Siri-Gemini product coming to Apple (NASDAQ:AAPL) devices in just a few months, perhaps there’s more upside for shares of Alphabet. Of course, it seems like Apple stands to gain more from a $1 billion deal to license Gemini.
However, if the Gemini-jolted Siri does turn out to be a hit, I’d argue that the potential of where the partnership could go next might give shares of Alphabet a massive jolt. Even if Apple didn’t pay Google for its AI tech, I still think there are massive gains to becoming not only the default AI of the Apple ecosystem, but perhaps one that’s embedded into the experience.
Given further AI monetization potential (in the cloud and on device) and Waymo’s evolution, it’s no mystery as to why so many analysts are sticking with the name after a magnificent year.
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