Alphabet Inc., Google’s corporate parent, joined the $4 trillion club on Monday as its market value topped $4 trillion, adding another milestone to the run-up that has accompanied the artificial intelligence boom.
The company reached the valuation threshold about four months after a ruling last year in a U.S. antitrust case found Google’s search engine was an illegal monopoly. In response to the government’s case, a federal judge overseeing the matter ordered a shake-up that investors widely interpreted as a mild remedy, the Associated Press reported.
Alphabet’s stock price rose 57% since then, and the run-up created an additional $1.4 trillion in shareholder wealth, according to the AP’s report. The valuation jump has propelled Alphabet into a group that includes other major technology companies whose market caps have been driven by expectations that they can profit from the next wave of AI products.
The $4 trillion milestone also follows Nvidia, which became the first company to cross $4 trillion in July. The AP said Apple and Microsoft surpassed $4 trillion last year, but that both have fallen back amid worries that AI spending could become a bubble that eventually bursts.
Nvidia’s market value briefly topped $5 trillion in late October before backtracking, as AI bubble fears weighed on its shares. The report also tied the volatility to the fact that Nvidia’s chipsets are needed to power AI technology, making its fortunes closely linked to continued demand.
Other companies have also been valued in ways the AP linked to AI ambitions, including Amazon at $2.6 trillion and Meta Platforms at $1.6 trillion. The AP said Tesla, which is “betting heavily on AI,” was valued at $1.5 trillion and cited a compensation plan approved by the company for CEO Elon Musk.
Tesla’s approved compensation package would pay Musk $1 trillion if several targets are met, including reaching a market value of more than $8.5 trillion, the AP reported. The same valuation context has pushed investors to weigh AI progress and spending plans as major drivers of near-term market expectations across the sector.
Alphabet’s jump to $4 trillion also coincided with an Apple announcement that it would rely on Google’s AI technology to improve Siri after Apple said it had come up short in its own efforts to create more advanced features for the iPhone, the AP reported.
The AP said Alphabet is positioned to benefit as it works to turn its search products into more of a conversational answer engine. The company’s approach is aimed at competing with products including OpenAI’s ChatGPT and Perplexity, according to the report.
The next generation of Google’s Gemini model, which the AP said has been released recently and received “rave reviews,” has helped drive up Alphabet’s stock price, even as the report said some other AI-driven companies have dipped on continued bubble worries. The AP also said Alphabet’s Cloud division has emerged as its fastest growing segment during the past three years, and that AI technology has helped Waymo dispatch more self-driving vehicles across U.S. cities.
The antitrust fight over Google’s business has also remained part of the backdrop. The AP reported that U.S. District Judge Amit Mehta rejected a U.S. Justice Department proposal that would have required Google to sell Chrome, saying the technological advances unleashed by AI were already forcing significant changes in online search.
Still, the AP said Alphabet’s market value could fall if investor sentiment about the company’s exposure to a possible AI bubble changes quickly. In a November interview with the BBC, Alphabet CEO Sundar Pichai said: “I think no company is going to be immune, including us,” adding: “if the AI-driven euphoria suddenly evaporates.”