Why Google shares are soaring in 2026

Alphabet's Remarkable Surge: A New AI Leader Emerges

If you haven’t been following Alphabet’s recent developments, now is the time to pay attention.

This year alone, Alphabet’s stock has climbed 7.7%, pushing its market valuation past $4 trillion. Among the “Magnificent Seven,” Alphabet stands out as the top performer in 2026 by a significant margin.

For context, Nvidia, a major player in AI hardware, has seen its shares dip slightly over the same period.

Alphabet’s AI Momentum

Tom Sosnoff, a seasoned trader and founder of Thinkorswim, shared that he believes Google could finish the year with the highest market capitalization in the industry. Currently, Nvidia leads with a $4.52 trillion market cap, but Alphabet is making a compelling case as the dominant AI stock for 2026.

Alphabet recently secured a major partnership with Apple, integrating its Gemini AI models and cloud services into Apple’s upcoming AI features. Gemini 3, in particular, continues to be recognized as a frontrunner in the AI field, having surpassed ChatGPT in performance last autumn.

Alphabet CEO Sundar Pichai addresses the audience at Google I/O in Mountain View, California, on May 20, 2025. (AP Photo/Jeff Chiu, File)

Concerns about the profitability of Alphabet’s search business in the AI era have diminished, especially as the company introduces AI-powered summaries. Meanwhile, YouTube continues to be a significant revenue driver.

Analyst Insights and Future Prospects

Justin Post, an analyst at Bank of America, sees further upside for Alphabet. He notes that the market may soon recognize the unique value of Alphabet’s AI assets, especially as new deals and sector IPOs emerge. Factors such as increased monetization from AI-driven search results, cloud growth fueled by Gemini and AI chips, and new opportunities in agentic AI ecosystems could all contribute to Alphabet’s stock performance.

Post remains optimistic about Alphabet’s position, citing its leadership in large language models (Gemini), AI infrastructure (TPUs), consumer reach (search), and enterprise adoption (Cloud, Workspace). He maintains a Buy rating on the stock with a price target of $370, suggesting a potential 10% increase from current levels.

Stock Catalysts and Earnings Outlook

Alphabet’s stock is benefiting from clear growth drivers and strong momentum. If Wall Street analysts adjust their earnings per share (EPS) forecasts upward, the stock could see further gains.

According to data, the average EPS estimate for Alphabet in 2026 has barely changed over the past two months, despite the company’s robust business performance. While 11 analysts have raised their EPS projections in the last 30 days, the overall average has not increased significantly.

Long-Term Growth Expectations

Mark Mahaney, a technology analyst at Evercore ISI, predicts that Google Search and YouTube will continue to deliver strong double-digit revenue growth, with Google Cloud revenue potentially exceeding 40%. He also expects Waymo’s robotaxi service to expand rapidly across multiple cities. Mahaney believes these factors could support sustained 20% EPS growth, justifying a price-to-earnings multiple of 25x-30x and further stock appreciation. He rates Alphabet as Outperform.

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