Alphabet Shares Receive Boost: Strategies for Google to Outperform ChatGPT.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 08 2026
0mins
Should l Buy GOOG?
Source: Barron's
- AI Competition: Google’s Gemini and OpenAI’s ChatGPT represent a significant rivalry in the artificial intelligence sector.
- Analyst Support: Cantor Fitzgerald analysts have upgraded their rating on Alphabet, Google's parent company, predicting it will outperform in this competition.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to rise
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 302.820
Low
255.00
Averages
336.08
High
400.00
Current: 302.820
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Concentration: The CRSP U.S. Total Market Index includes 3,498 companies, with the top 65 accounting for 70% of the total market value, indicating extreme wealth concentration that may increase market volatility risks.
- Strong Performance of Giants: The top four holdings in the CRSP U.S. Mega Cap Growth Index—Nvidia, Apple, Microsoft, and Alphabet—have a combined value of $14.9 trillion, driving consistent strong returns and reflecting the dominance of the tech sector.
- ETF Investment Advantages: The Vanguard Mega Cap Growth ETF has delivered a compound annual return of 13.6% since its inception in 2007, with an even faster 18.8% annual return over the last decade, showcasing its potential in tech and AI investments, making it suitable for diversified portfolios.
- Balancing Risk and Reward: Despite the ETF's strong performance, its high concentration warrants caution; investors should avoid allocating all funds to it and consider it as part of a diversified portfolio to mitigate potential volatility risks.
See More
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- Amazon Cloud Acceleration: Amazon's Q4 sales rose 14% year-over-year to $213.4 billion, with AWS revenue increasing 24% to $35.6 billion, highlighting AI's critical role in driving growth and marking the fastest growth in 13 quarters.
- Strong Advertising Revenue: Amazon's advertising revenue grew 23% year-over-year to $21.3 billion, subscription services rose 14% to $13.1 billion, third-party seller services increased 11% to $52.8 billion, and online store revenue climbed 10% to $83.0 billion, indicating broad and sustained financial momentum.
- Google Cloud Rapid Growth: Alphabet's total revenue grew 18% year-over-year in Q4, with Google Cloud revenue surging 48%, significantly outpacing Amazon's growth, showcasing Google's strong performance and market potential in the AI sector.
- Risk-Reward Tradeoff: While Amazon and Alphabet have similar P/E ratios of 28.6 and 28.1 respectively, Alphabet's faster cloud growth may offer higher returns, although both companies' substantial spending plans introduce increased investment risks.
See More
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- Strategic AI Investments: Google CEO Sundar Pichai acknowledged concerns about an AI bubble but emphasized that the company's investments in AI infrastructure and innovation are strategic, aimed at capturing long-term growth opportunities based on technological progress.
- Potential of AI Revolution: Pichai compared the current AI revolution to an industrial revolution, asserting that its speed and scale are unprecedented, highlighting how Google's AI work underpins multiple businesses, including Search, YouTube, and Cloud, showcasing AI's foundational role in future growth.
- AGI and Human Role: DeepMind co-founder Demis Hassabis stressed that artificial general intelligence (AGI) is a long-term goal, noting that today's AI tools enhance human expertise rather than replace it, while urging responsible management of technical and economic risks in addressing global challenges.
- Impact on Skills and Employment: Google SVP James Manyika pointed out the significant impact of AI on employment, calling for governments and organizations to focus on upskilling and task-based workforce planning to prepare for the evolving labor market, emphasizing the foundational importance of investing in skills and literacy.
See More
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- New Investment Position: Baupost Group established a new stake in Amazon during Q4, making it the fund's second-largest holding at 9.3% of assets, reflecting confidence in the e-commerce and cloud giant despite differing views from Buffett.
- Portfolio Adjustments: The fund completely exited its position in PagSeguro Digital in Q4, indicating a strategic portfolio adjustment likely based on market performance and future expectations.
- Top Holdings: As of December 31, Restaurant Brands International remains Baupost's largest holding, indicating sustained confidence in the restaurant sector, and it was also the top holding in Q3, showcasing stability.
- Market Performance Comparison: Amazon was the worst-performing stock among the Magnificent Seven in 2025, and Baupost's investment decision may be based on optimism regarding its cloud segment growth, which will test the effectiveness of Klarman's strategy against Buffett's reduction in exposure.
See More
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Reduction in Shareholding: Since November 19, 2025, Pichai has reduced his shareholding in Alphabet-C and Alphabet-A by 219,000 shares, totaling an approximate value of $69.34 million.
See More
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- Stock Performance: Amazon.com stock has experienced a challenging start to the year.
- Investment Opportunity: The current stock situation may present a buying opportunity for investors optimistic about the potential returns from significant spending on artificial intelligence.
See More
