Alphabet Stock (GOOGL) Finished 2025 as the Top Megacap Performer — Can the Rally Continue in 2026?

Alphabet Inc. (GOOGL), the parent company of Google, closed 2025 as one of Wall Street's biggest winners, powered by a sharp rebound in confidence around its AI strategy.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Among the eight U.S. tech firms valued above $1 trillion — including Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), and Amazon (AMZN) — Alphabet emerged as the top performer in 2025. GOOGL stock surged 65% in 2025, its best year since 2009. By comparison, chipmakers Broadcom (AVGO) and Nvidia were the next best performers, rising about 49% and 35%, respectively. Investor Worries Ease as Google Doubles Down on AI The rally did not come easily. Alphabet shares fell nearly 18% in the first quarter, their weakest stretch since mid-2022, as investors feared AI chatbots like ChatGPT could pull users and ad dollars away from Google Search. Momentum picked up after Google rolled out updates to its Gemini models and pushed the Gemini app more aggressively. New features, including popular image tools, helped drive higher usage and renewed interest in the platform. At the same time, demand for Google's custom AI chips, known as TPUs, continued to grow. Partnerships, including AI-related work with Meta Platforms (META), highlighted Google's role as a key provider of AI computing power. Together, progress in Gemini, rising TPU demand, and deeper ties with large tech customers helped change the narrative. By mid-year, investors were no longer focused only on AI risks, but on how Google's AI stack could drive growth across search, cloud, and beyond. Why Analysts Turned More Positive Wall Street's view on Google has changed as its AI strategy becomes clearer. Investors are now less worried about AI hurting search and more focused on whether AI tools can increase search use and support ad revenue. Just recently, top Citizens Analyst Andrew Boone raised his price target on Alphabet to $385 from $340 and reiterated a Buy rating. He said recent AI updates are making search more useful, which is leading users to engage more. Boone expects this to support faster search revenue growth in the fourth quarter of 2025, a key point investors are watching. Beyond search, analysts also pointed to strength in cloud computing and long-term bets like autonomous driving through Waymo as added drivers heading into 2026. Is GOOGL a Buy or Sell Stock? According to TipRanks, GOOGL stock has a Strong Buy consensus rating based on 27 Buys and seven Holds assigned in the last three months. At $327.42, the Alphabet average share price target implies almost 4.32% upside potential.