Alphabet(US:GOOG) The Motley Fool·2025-12-17 22:30Core Viewpoint - The article discusses the potential for Alphabet to become the next company to achieve a $4 trillion market cap, following Nvidia and Apple, highlighting its recent stock performance and advancements in AI technology [1][2][15]. Group 1: Market Capitalization - Alphabet currently has a market cap of $3.7 trillion, surpassing Microsoft's $3.5 trillion [4]. - The company has seen significant growth, with its market cap previously being under $2 trillion as of spring 2025 [4]. Group 2: AI Developments - The rise of ChatGPT and the release of GPT-4 in 2023 negatively impacted Alphabet's stock, causing its market share in search to fall below 90% for the first time in decades [6]. - Alphabet's release of Gemini 3 in November has garnered attention for its improved capabilities, with some analysts claiming it is "better than ChatGPT" [11]. Group 3: Financial Performance - Alphabet has pledged to spend between $91 billion and $93 billion on capital expenditures in 2025, focusing on enhancing legacy products and AI integration [9][10]. - The stock has increased over 60% in the past year and more than 110% from its April low, with nearly half of that increase occurring since October [11]. Group 4: Valuation and Investment Appeal - Despite recent gains, Alphabet remains the second-cheapest stock among the "Magnificent Seven," with a P/E ratio of around 30, only slightly higher than Meta Platforms at 28 [13]. - The combination of a relatively low valuation and the success of Gemini 3 positions Alphabet favorably for future growth [15][16]. Group 5: Competitive Landscape - Alphabet's aggressive application of AI technology in Google Cloud and its efforts with Waymo could lead to significant revenue opportunities [10][16]. - The company is positioned to not only reach a $4 trillion market cap but also to challenge Apple and Nvidia for the title of the world's largest market cap [17].