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Alphabet’s 2025 Rally Resets Expectations for 2026 After AI Wins and Legal Clarity

Investors now face a richer valuation, making future returns hinge on sustained AI traction.

Overview

  • Alphabet shares rose about 65% in 2025 as Gemini adoption and AI features in Google Search boosted confidence.
  • The stock now trades near roughly 30 times forward earnings, up from under 14 times in April.
  • A U.S. judge ruled the company acted as an illegal monopoly in search but did not order a breakup, allowing operations to continue with mandated changes.
  • Yahoo Finance cautions that the re-rating likely limits the chance of another outsized gain in 2026.
  • A Seeking Alpha author names Alphabet a top 2026 pick, citing AI integration and growth across ads, YouTube and Cloud as support for moderate returns.