(Reuters) – Google parent Alphabet hit a market capitalization of $3 trillion for the first time on Monday, riding on renewed optimism around artificial intelligence and a favorable antitrust ruling.
Class A shares of the company were up 3.6% at $249.1, while Class C shares climbed 3.4% to $249.5 – both trading at record highs.
Including Monday’s moves, shares have rallied more than 32% so far this year, the best performer among the so-called “Magnificent 7” stocks and outpacing the 12.5% gain for the S&P 500. Alphabet joined other tech giants Apple and Microsoft in clinching a $3 trillion valuation, while AI chipmaker Nvidia, the world’s most valuable company, boasts a market cap of $4.25 trillion.
The latest boost for Alphabet was a ruling by a U.S. court that allowed the company to retain control of its Chrome browser and Android mobile operating system, marking a pivotal moment for the company whose dominance in search and mobile ecosystems has long drawn scrutiny.
While sharing data as part of the ruling will strengthen Google’s advertising business rivals, not having to divest Chrome or Android removes a major concern for investors who view them as key pieces to Google’s overall business.
Investor sentiment also got a lift after the company’s cloud-computing unit delivered an almost 32% jump in second quarter revenue, surpassing expectations as investments in in-house chips and the Gemini AI model began to pay off.
“They still are very dependent on search, but with YouTube, Waymo, and other capabilities and products they’re working on, investors are starting to see that possibility that this isn’t just a search company anymore, this is a company that’s moving into a lot of other things,” said Dennis Dick, chief strategist at Stock Trader Network.
Alphabet trades at around 23 times its forward earnings – the lowest among the “Magnificent 7” – compared to its five-year average 22, according to data compiled by LSEG.
(Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru: Additional reporting by Purvi Agarwal; Editing by Tasim Zahid and Sriraj Kalluvila)