Alphabet breaks above $400 as long-term prospects remain constructive
Amid sustained demand, AAPL broke resistance around the $390 level and attacked the $402 level, near which Friday’s trading session closed. At the moment, the stock is trading at $396 in the premarket, which may signal the potential development of a downward correction.
Nevertheless, Alphabet remains one of the strongest AI assets among Big Tech following a very strong Q1 2026. The company’s revenue grew by approximately 22% year-over-year to $109.9 billion, while Google Cloud showed record growth of 63% YoY driven by explosive demand for AI infrastructure and Gemini Enterprise. The market increasingly perceives GOOGL not as an “advertising company,” but as a full-fledged AI ecosystem: Search, Gemini, YouTube, TPU chips, Cloud, and Waymo are beginning to reinforce each other simultaneously.
Google Cloud and Gemini have become the main drivers of the stock’s revaluation
The key event of recent weeks was the Google Cloud Next 2026 conference, where the company introduced the Gemini Enterprise Agent Platform and the new eighth-generation TPU Ironwood. Google is betting on “agentic AI” and is attempting to take a central position in enterprise AI infrastructure, directly competing with Microsoft Azure and AWS. Analysts note that Cloud has now become the main factor behind Alphabet’s valuation growth: Google Cloud backlog has surged, while demand for AI compute is already starting to be constrained by capacity shortages.
However, risks for Google are becoming increasingly serious
At the same time, pressure is intensifying on two fronts — antitrust and AI spending. The DOJ continues its antitrust pressure on Google Search and the adtech business, although the market reacted positively to the absence of a forced breakup scenario involving Chrome and Android. At the same time, investors are becoming concerned about the scale of AI investments: Alphabet is already forecasting capex of around $180–190 billion for AI data centers, TPUs, and infrastructure. This is the largest investment program in the company’s history, and the market is beginning to question how quickly Google will be able to monetize these expenditures.
The main catalyst — Google I/O and further AI monetization
The next key trigger for the market is Google I/O in May, where investors expect a large-scale expansion of Gemini across Search, Android, and Workspace. At present, Alphabet appears to be one of the main beneficiaries of the AI cycle due to its combination of Cloud, proprietary AI infrastructure, and extremely strong consumer distribution via Search and YouTube. However, further growth in GOOGL increasingly depends on whether the company can maintain Search dominance in the era of AI answers while simultaneously justifying its record infrastructure spending.
For now, the market remains moderately bullish on Alphabet, and Google is increasingly viewed as the most balanced AI player among Big Tech, as previously discussed in the article Alphabet remains key leader in AI market.
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