Google Stock Surges 10%; What’s Driving the Alphabet Rally?

Alphabet kicked off the week with a sharp rebound as Google share price surged more than 6% on Monday and added another 4% in pre-market trade today, according to Google Finance data.

The momentum in Google (GOOGL) stock quickly spilled over into other AI-linked names such as Broadcom, Micron, and AMD advanced up to 11%. This sudden resurgence set the tone for a broader rotation back into AI, raising a simple question: Why is Google stock rising?

What’s unfolding right now is not a one-off spike. It reflects a deeper shift in how investors are viewing Google’s place in the AI stack, and the competitive landscape around Nvidia. Let’s unpack this rally in this blog.

What Driving Alphabet Stock Rally?

Alphabet has gained roughly $1 trillion in market value since mid-October. As of Monday’s close, Alphabet sits around $600 billion behind Nvidia’s $4.4 trillion valuation. That gap matters: it signals that investors believe Google is re-entering the race for AI stocks leadership.

The catalyst is straightforward. Google is finally showing visible, commercial progress with its AI models and its custom hardware. After months of pressure from OpenAI and Microsoft, Alphabet is delivering at a pace that has surprised both analysts and competitors.

Gemini 3 Strengthens Alphabet’s Competitive Position

One of the driving forces behind the rally in Google stock is the strong performance of Google’s latest Gemini 3 model. According to Bloomberg, Gemini 3 Pro offers improved reasoning, stronger multimodal capabilities, and better agent-like workflows. Benchmarks show material gains over the previous generation, especially in visual understanding, coding, and academic problem-solving.

What truly shifted sentiment is Google’s decision to integrate Gemini directly into Search at launch. Analysts view this as a meaningful step toward embedding AI into Alphabet’s core revenue engine and positioning the company to monetise AI more directly across advertising, productivity, and cloud workloads.

Gemini is also rolling out across the Gemini app, AI Mode in Search, and Google’s developer ecosystem. For the first time, Google is demonstrating product cohesion in its AI strategy, something investors have been waiting to see for nearly a year.

Alphabet TPUs Gain Traction as Alternative to Nvidia

The other major driver is growing confidence in Alphabet’s tensor processing units (TPUs). A report by The Information stated that Meta is in early discussions to use Google’s TPUs in its data centers by 2027, and may even rent TPU capacity through Google Cloud as early as next year.

If this moves forward, it would mark one of the first large-scale deployments of a non-Nvidia AI accelerator by a major tech company. That development has market-wide implications:

• Google Cloud gains leverage in enterprise AI infrastructure
• Nvidia’s dominance faces a credible challenger
• Chip partners like Broadcom experience stronger demand, which explains their sharp rally this week

This shift gives Alphabet a strategic advantage across hardware, software, and cloud.

AI Leadership Narrative Turning in Alphabet’s Favour

Google’s position one year ago looked very different, especially after the arrival of ChatGPT. For months, the dominant narrative was that Alphabet was behind. That narrative is now fading. Here are some of Alphabet’s strengths that are repricing GOOGL stock:

• Expansion in Search and Ads, still the company’s strongest engine
• A more competitive Google Cloud, benefitting from AI workloads
• Clearer monetisation of Gemini and agent-driven workflows
• A more disciplined, shareholder-friendly capital allocation strategy

Adding to this, billionaire George Soros is betting on Alphabet (Google). Although he no longer actively runs Soros Fund Management, the fund made a notable move in Q3, increasing its GOOGL holdings by 631,397 shares, as referenced by TipRanks. The position now totals 658,367 shares, signaling renewed institutional confidence.

Market Structure Amplifies Google Stock Rally

Alphabet didn’t just rise in isolation. CNBC noted that Monday’s jump effectively revived the AI trade, pushing the Nasdaq to its best day in nearly six months. At the same time, analysts like Ben Reitzes from Melius Research cautioned that Alphabet’s rapid gains may introduce pockets of volatility for companies viewed as competing directly in AI infrastructure.

This push-pull dynamic with optimism on one side and competitive concerns on the other, adds to the intrigue around the current rally.

What This Means for Alphabet Stock Price

The rise in Alphabet stock price reflects a multi-layered shift. This combination strengthens Alphabet’s long-term positioning and reinforces why the market is reassessing the company’s valuation. 

It is worth noting that the search interest for Google stock has increased by 171% in the last 30 days in India, according to INDmoney data, reflecting an upward trend in search activity. 

Additionally, based on INDmoney’s consensus of 62 analysts, 82.26% recommend a 'BUY' rating for the stock with an average target price of $322.52, higher than its last closing price of $318.54.

The Final Takeaway from Google Stock Rally

Google’s recent surge is a byproduct of clearer execution, a stronger AI roadmap, and signs that Alphabet is emerging as a serious infrastructure player, not just a model developer. If Alphabet continues to convert these strengths into measurable performance, the momentum behind Google stock is likely to stay on investors’ radar in the months ahead.

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