Google’s parent company Alphabet has become the fourth Big Tech group to hit a $4tn market value, fuelled by investor optimism that its artificial intelligence models can compete with rivals such as OpenAI.
Alphabet shares rose 0.2 per cent in early trading in New York on Monday, capping a more than 6 per cent rise in the past month and catapulting the company over a threshold already surpassed by Nvidia, Apple and Microsoft.
At the start of last year, Alphabet’s shares had been lagging behind the broader AI-driven rally in Big Tech stocks, amid fears that its cash-cow search engine would be overshadowed by new apps such as ChatGPT and Perplexity. The stock has more than doubled since April, as Demis Hassabis, co-founder of DeepMind, Google’s AI arm, led the group’s effort to make inroads on ChatGPT.
Alphabet also showed investors that its advertising revenues were still growing strongly despite the threat from chatbot rivals. The company’s quarterly revenues grew 16% in the third quarter to surpass $100bn for the first time, it said in October, boosted by its booming cloud computing business and YouTube ads. Its Gemini app has grown rapidly to 650mn monthly users. Investors have also become more bullish on the company’s prospects after US courts signalled that they were unwilling to break up the Big Tech group.
Last year, a US federal judge said that the Department of Justice’s request for Alphabet to spin off elements of its advertising business would not be “easily enforceable”, despite the court finding in April that the company had an illegal monopoly in digital ads. An Alphabet’s stock-price momentum has also allowed Google co-founder Larry Page to leapfrog Oracle’s executive chair Larry Ellison as the world’s second-richest person after Elon Musk.
