Google Stock: Why Alphabet Is Crushing the Market

Alphabet (GOOG, GOOGL) has been the standout performer among the tech giants this year, with its stock soaring approximately 55% since the start of 2025. This remarkable performance has positioned Google as the best-performing stock in the prestigious "Magnificent Seven" group, outshining even industry leader Nvidia by nearly 20 percentage points.

Google's Gemini 3 AI model interface showing multimodal capabilities - Image from https://tse3.mm.bing.net/th/id/OIP.kf23wlD2Crw8b424CqnfhAHaDq?pid=Api

The Double Catalyst: Gemini 3 and Berkshire Hathaway

Two significant developments have been instrumental in driving Alphabet's impressive stock performance. First, Google's latest AI model, Gemini 3, was released to much acclaim. Google DeepMind executives have described this iteration as "the best model in the world for multimodal understanding and our most powerful agentic and vibe coding model yet."

Beyond the technical superiority, investors were particularly impressed by Alphabet's claim that the Gemini app has already amassed more than 650 million monthly users, indicating strong market adoption and competitive positioning. This rapid user growth has alleviated some concerns about Google's ability to monetize its AI investments.

The Buffett Effect

In a surprising move that sent waves through Wall Street, Berkshire Hathaway revealed a nearly $5 billion investment in Alphabet. This marked a rare bet on technology by Warren Buffett's conglomerate, linking Google's stock to the legendary investor's stamp of approval. The news came as Buffett announced his retirement plans, adding another layer of significance to this investment.

Warren Buffett announcing Berkshire Hathaway's investment in Alphabet - Image from https://www.bing.com/th?id=OIP.yg-8EQZey27LfBFEbhgk8wHaEK&w=120&h=120&c=1&pid=5.1

Bucking the AI Investment Trend

While many tech stocks have faced pressure recently due to concerns about overvaluation and unsustainable infrastructure spending in the AI sector, Alphabet has remarkably bucked this trend. Heading into November's trading sessions, Google was the only Magnificent Seven stock to demonstrate positive performance since the start of the month.

This resilience has been further strengthened by Alphabet's third-quarter earnings report, where the company raised its full-year investment forecast for the third time in 2025 and reported accelerated growth across its business segments. These results have convinced many investors that, contrary to market skepticism, AI is indeed enhancing Google's core search business rather than cannibalizing it.

Analyst Outlook

Wall Street remains generally optimistic about Alphabet's future prospects. Among the 15 analysts tracked by Visible Alpha, twelve recommend buying the stock, with the remaining three rating it a "hold." Their average price target of $324 suggests about 14% upside potential from recent levels.

As the AI landscape continues to evolve, Google's combination of technological innovation, strategic investments, and market position appears to be yielding substantial returns for investors. While concerns about the AI bubble persist, Alphabet's performance suggests that the company is well-positioned to capitalize on the ongoing digital transformation.

Conclusion

Alphabet's stock performance this year has been nothing short of exceptional, driven by breakthrough AI technology and the backing of one of the most respected investors in history. As the company continues to integrate AI into its core products and expand its technological capabilities, investors will be watching closely to see if this remarkable momentum can continue in the coming quarters.