Google wraps up best year on Wall Street since 2009, beating megacap peers as AI story strengthens

Core Viewpoint - Google achieved its strongest performance since 2009, with Alphabet's stock rising 65% in 2025, outperforming other tech giants [2][3] Stock Performance - Alphabet's stock saw a significant increase of 65% for the year, surpassing gains from 2021, with shares hitting a low in April before rebounding over 100% [2] - Among tech companies valued over $1 trillion, Alphabet was the largest gainer, while Broadcom and Nvidia followed with gains of 49% and 39% respectively [2] AI Developments - Google faced skepticism regarding its ability to maintain dominance in the AI era, particularly with competitors like OpenAI's ChatGPT [2] - The Gemini app, launched to compete with ChatGPT, gained traction, surpassing 5 billion images generated and topping the Apple App Store [4] - Google expanded its AI talent pool by acquiring key personnel from the AI startup Windsurf for $2.4 billion [5] Legal and Regulatory Environment - A U.S. District Judge ruled against severe consequences for Google in an antitrust case, allowing the company to retain its Chrome browser and continue paying for default search engine placements [6][7] Market Position and Growth - Gemini's usage share increased to approximately 18%, while ChatGPT's share dropped to about 68% [8] - Analysts believe Google's AI investments are positively impacting its core search business, with expectations for a 15% revenue growth in Q4 2025 [10][11] Financial Outlook - Alphabet raised its capital spending forecast for 2025 to $93 billion, with projections for 2026 exceeding $114 billion [12] - Google's cloud business signed more deals over $1 billion in 2025 than in the previous two years combined, indicating strong demand [12] Analyst Sentiment - Despite potential risks from OpenAI's financial obligations, analysts maintain a buy rating on Alphabet's stock, raising the price target to $400, approximately 28% above its recent closing price [13] - Analysts predict a market shakeout similar to 2000, with Google positioned to lead among fewer dominant competitors [14]