Alphabet closed 2025 with a 65% year-to-date gain, outpacing all peers in the so-called Magnificent Seven and cementing its position as the best performer in the group. The company reported over $100 billion in quarterly revenue for the first time in Q3, driven by a 16% year-over-year increase in advertising sales and robust growth across cloud and AI services. Strong operating leverage lifted earnings per share by more than 30%, highlighting the impact of AI-powered efficiency gains on the core search and media businesses.

The rollout of Gemini 3 has accelerated user engagement on Google Search, with AI Overviews and AI Mode now handling over 10 billion daily queries. Investors view this as a critical defense of the company’s search advertising franchise against standalone chatbots. Behind the scenes, Alphabet’s decade-old Tensor Processing Units (TPUs) continue to drive cost advantages: recent third-party orders from Anthropic validate the chips’ market leadership. Rumors of an upcoming integration of Gemini into Apple’s voice assistant further underscore Alphabet’s strengthening position as the provider of choice for large language models.

Google Cloud revenue climbed 34% year over year in Q3, while segment operating income surged 84% as margins expanded through higher utilization of both TPUs and third-party GPUs. Management has accelerated capital investment to alleviate capacity constraints, signaling confidence in continued demand for AI compute. Beyond enterprise services, the development of Waymo’s robotaxi network remains a long-term catalyst: Alphabet has expanded its autonomous vehicle footprint to six U.S. cities, with plans to double rider trips in 2026. Analysts expect this nascent Mobility unit to contribute meaningful incremental revenue starting in the latter half of the year.