If you aren’t watching the story unfolding at Alphabet (GOOG, GOOGL), you need to wake up.
Shares of the search giant are already up 7.7% this year and the company’s market cap has settled above $4 trillion. It’s the best-performing member of the “Magnificent Seven” in 2026 by a country mile.
For comparison, shares of AI chip darling Nvidia (NVDA) are down slightly on the year.
“I think Google could end the year with the highest market cap [in the market],” veteran trader and Thinkorswim founder Tom Sosnoff said on Yahoo Finance’s Opening Bid. Nvidia currently holds that distinction with a $4.52 trillion market cap.
But Google is making a strong case it will be the AI-centric stock to beat in 2026.
It just scored a huge deal with Apple (AAPL), where its Gemini models and cloud technology will power the next generation of the smartphone maker’s AI. Speaking of models, Gemini 3 is still being viewed as the leader in the space after surpassing ChatGPT in terms of performance last fall.
The concerns about the search business’s profit potential in the age of artificial intelligence have quieted down amid a push into AI summaries on the platform. And YouTube remains a financial juggernaut.
Bank of America analyst Justin Post said more positives lay ahead.
A greater Street appreciation of Alphabet’s differentiated AI asset base aided by new deals and sector IPOs may get priced into the stock. So could a “higher traffic monetization driven by a shift to AI query results,” cloud growth upside supported by Gemini and AI chips, and new opportunities around an agentic AI ecosystem.
“With Google in a strong AI position and several big AI IPOs ahead, we remain constructive on Alphabet given leading AI position in the sector across LLM (Gemini), infrastructure (TPUs), consumer reach (search), and enterprise adoption (Cloud, Workspace),” Post wrote.
Post sports a Buy rating on Alphabet with a $370 price target, which assumes about 10% upside from current levels.
The clear catalysts and underlying momentum in the stock are readily apparent. And if the Street catches up with its earnings per share (EPS) estimates, it may push up the stock more.
Yahoo Finance data shows the average EPS estimate on Alphabet for 2026 has barely risen in the past 60 days, despite Google’s business moving full steam ahead. A total of 11 Wall Street analysts have lifted their EPS projections on Alphabet the past 30 days, but the hikes look modest given the mean estimate hasn’t risen substantially.
“Fundamentally, we believe Google Search and YouTube revenue growth will remain solid double-digit percentage growers for the foreseeable future (with likely near-term modest acceleration), Google Cloud revenue growth will likely elevate to 40% plus, and Waymo’s robotaxi offering will accelerate its multi-city rollout,” Evercore ISI tech analyst Mark Mahaney wrote in a note. “The financial upshot is a business that should be able to sustain 20% EPS growth, which we believe would support a 25x-30x P/E multiple and plausible stock upside from here.”
Mahaney gave Alphabet an Outperform rating.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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