Alphabet: The AI Leader Best Positioned to Dominate 2026

Alphabet (NASDAQ: GOOGL) is not only outperforming the broader market in 2025, but it has also overtaken many of its Magnificent Seven peers and, more importantly, its closest AI competitors. 

That hasn’t always been the case. For much of H1 2025, the stock was weighed down by concerns over rising AI competition, regulatory pressure, and inconsistent relative strength.

But the last three months have become a defining chapter for the tech giant.

Sentiment has flipped from caution to outright conviction, and Alphabet is now viewed as the frontrunner to lead the next phase of AI adoption.

That shift hasn’t come from hype, but from execution.

Google’s accelerating AI advancements, impressive cross-segment growth, and a surprise endorsement from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) have forced even the most skeptical investors to take notice.

With the stock up 70% year-to-date (YTD) and 130% off its 52-week low, investors are wondering how much higher the stock could go. 

Google’s Gemini 3 Reinforces Its AI Lead

On Nov. 18, Google released Gemini 3, its newest AI model, and the response was immediate. While competitors like NVIDIA (NASDAQ: NVDA) saw share-price pressure in the days that followed, with the stock down over 7% on the month, GOOGL experienced a surge in bullish sentiment. Analysts issued wave after wave of upgrades, many of which highlighted that Gemini 3 topped industry benchmarks in math, coding, science, and multimodal reasoning.

One of the biggest revelations from the release was that Gemini 3 was trained primarily on Google’s in-house TPU chips rather than NVIDIA GPUs. That detail alone sparked a market reaction, with some analysts noting that Google’s vertical integration gives it both a pricing and scalability edge. Even NVIDIA publicly acknowledged the moment, congratulating Google while reminding the market that its own platform remains broadly adopted.

The Gemini 3 release also drew praise from across Silicon Valley. Salesforce CEO Marc Benioff said after just hours of testing the model, “It feels like the world just changed, again.” That sentiment is being echoed by many on Wall Street who are now increasingly describing Google as the company with the most apparent competitive advantage in foundational AI.

Could Google's TPUs Go Mainstream?

One development gaining attention is the possibility that Google’s TPUs may soon move beyond its own cloud infrastructure. According to recent reporting, Google has begun pitching its next-generation TPUs for on-premise use inside customer data centers, a significant shift from its long-standing strategy of keeping them exclusive to Google Cloud.

Among the companies in discussions is Meta Platforms (NASDAQ: META), which is reportedly exploring a multibillion-dollar deal to integrate TPUs into its data centers starting in 2027 while also renting TPU capacity from Google as early as next year.

Momentum Was Building Even Before Gemini 3

Even before its latest model release, Alphabet was enjoying one of its strongest stretches in years. Berkshire Hathaway’s recently disclosed position shocked Wall Street, not because Buffett bought tech—he already owns Apple—but because he chose Alphabet at a moment when its stock had already enjoyed significant upside for the year. The market took the signal seriously, and the timing could not have been more aligned with Google’s improving fundamentals.

The company’s most recent earnings report delivered its first $100B quarter, with growth across Search, YouTube, Cloud, and subscription services. Google Cloud’s profitability continued to expand, ad revenue accelerated, and management highlighted broad-based improvement across the business. For a company of Alphabet’s size to reaccelerate at this pace is rare, and it has amplified the view that the stock may still be early in a multi-year breakout.

Alphabet Sets the Pace in the AI Race

Momentum is now working decisively in Alphabet’s favor. Gemini 3 has strengthened its AI leadership, TPUs are emerging as a credible alternative in the hardware race, fundamentals continue accelerating, and Buffett’s backing has reinforced confidence in its next phase of growth. With execution improving across every division, it’s difficult to see this momentum slowing as 2026 approaches. Alphabet isn’t just participating in the AI race; it’s increasingly setting the pace.

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The article "Alphabet: The AI Leader Best Positioned to Dominate 2026" first appeared on MarketBeat.