Google investors have big expectations after stock’s sharpest quarterly rally in 20 years

Core Viewpoint - Alphabet's stock has seen significant gains, with a 38% increase in Q3, attributed to improved investor sentiment and a favorable ruling in its antitrust case, but concerns remain regarding its position in the AI market [1][3][6]. Financial Performance - Alphabet's revenue growth has been stagnant in the low teens, with expectations of 12% growth next year, leading to recalibrated investor expectations [2]. - Wall Street anticipates Q3 revenue of $99.89 billion, reflecting a 13% growth, and earnings per share of $2.26 [7]. Antitrust Case and Market Position - A recent ruling by U.S. District Judge Amit Mehta allowed Google to retain its Chrome browser but mandated data sharing with competitors, which has implications for its competitive landscape [3][15]. - The ruling is seen as a mixed outcome, with some analysts expressing concerns about Google's competitive position in AI, particularly against emerging players like OpenAI [8][14]. AI Developments - Google is heavily investing in its AI models, particularly Gemini, which is positioned as more than just a competitor to ChatGPT [5][10]. - The launch of Gemini Enterprise targets corporate clients, enhancing Google's capabilities in the AI space [11]. - Analysts expect the upcoming release of Gemini 3 to positively influence investor sentiment towards Alphabet [14]. Competitive Landscape - The AI market is described as highly competitive, with ChatGPT holding an 81% share of the global AI chatbot market, followed by Perplexity and Microsoft Copilot [9]. - Google's data-sharing requirements may benefit competitors like DuckDuckGo and Microsoft Bing, potentially narrowing Google's advantage in search [16].