Key Takeaways

• Gemini 3 puts Google ahead in AI with smarter, faster, and more versatile capabilities.
• Alphabet stock climbs as investors bet on AI, Waymo, and cloud growth.
• Google challenges Nvidia AI dominance.

Google’s AI Comeback: From Lagging Behind to Leading the Race

Google has staged one of the most impressive comebacks in tech history. Three years after the debut of ChatGPT, the company not only closed the gap but is now challenging OpenAI in language models and Nvidia in AI hardware.

Alphabet shares jumped 8% this week after reports that Meta is preparing to buy billions of dollars’ worth of Google’s TPU processors to power its AI data centres. If finalised, the deal would come directly at Nvidia’s expense.

After a decade of building TPUs for internal use, Google is now marketing them to cloud giants. Its initial ambition is to capture some of Nvidia’s data centre chip market, as companies are motivated to diversify away from Nvidia and are looking for cheaper alternatives to boost margins.

Just weeks earlier, the developer of the Claude chatbot Anthropic, agreed to purchase one million TPUs and run workloads on Google Cloud. Although Anthropic also signed deals with Nvidia and Microsoft, the scale of its Google order shows rising confidence in Google’s hardware stack.

Gemini 3 Positions Google as New AI Superpower

Alphabet’s Gemini 3 has completely changed investor perception of Google’s AI capabilities, positioning the company as a direct challenger to both OpenAI and Nvidia. With advanced multimodal reasoning, long-context processing, and seamless integration across Search, YouTube, and Cloud, Gemini 3 is seen as Google’s first truly enterprise-ready AI platform.

The launch has fuelled a surge in Alphabet’s stock, which has hit a new record high of $328.67 on Tuesday and added nearly $1 trillion in market value in just six weeks. Wall Street analysts are raising targets, momentum traders are piling in, and Buffett’s recent multibillion-dollar stake has reinforced the view that Alphabet’s AI strategy is grounded in durable economics rather than hype. With nearly 70% year-to-date stock gains and a market cap approaching $4 trillion, Alphabet is emerging as the next dominant force in AI infrastructure.

At the same time, Google is advancing a bold challenge to Nvidia’s hardware supremacy. The company is now offering its custom TPU chips for deployment inside customer’s data centres, which is a major change after years of limiting them to Google Cloud. Meta is emerging as a key prospective buyer, reportedly in talks to spend billions to integrate TPUs into its own data centres from 2027 while also planning to rent TPU capacity as early as next year.

Meta’s potential move away from Nvidia would be a massive win for Google and an unusual blow to Nvidia, whose stock has already reacted to the reports. Alphabet, now just $646 billion shy of Nvidia’s valuation, suddenly looks poised to overtake what once seemed an unshakeable leader. The AI race is no longer about models alone; it’s rapidly becoming a two-horse contest between Google and Nvidia for control of the entire AI compute stack.

Google DeepMind’s latest release, Gemini 3, is the company’s most advanced AI yet. The model introduces a “Deep Think” reasoning mode and demonstrates impressive performance across coding, math, science, multimodal reasoning, and creative tasks. Within 24 hours, over one million users tested Gemini 3 through Google AI Studio and the Gemini API, showing unprecedented early adoption for any model release.

Executives in the tech industry are taking notice, and their early endorsements highlight the model’s credibility across different sectors.

This enthusiasm has also translated to the markets. Alphabet shares surged following the launch, pushing the company closer to a $4 trillion market capitalization. Gemini 3 is shaping up to be a key factor in Alphabet’s accelerating growth, alongside Waymo expansion and Google Cloud infrastructure.

Waymo and Cloud: Alphabet’s Long-Term AI Engines

Gemini 3’s launch is complemented by Alphabet’s broader strategy. Waymo continues to expand, adding new cities and accumulating autonomous driving data that improves AI performance and safety. Google Cloud is investing in hyperscale data centres, including a $2 billion project in Turkey with Turkcell, ensuring the company has the computing power to support AI growth.

Together, these initiatives reinforce Alphabet’s competitive moat. By controlling both AI models and the infrastructure to run them efficiently, Alphabet strengthens its pricing power, enterprise appeal, and long-term growth prospects.

Source: TradingView. GOOG vs. NVDA YTD share price performance as of 26 November 2025.

Google’s TPU Edge and Vertical Integration Drive a New Era of Growth

Alphabet’s stock has reflected the excitement around the launch of Gemini 3, which did not come as a routine update, but as a move that could chang direction for the entire industry. Its shares hit record highs above $328 this week, extending gains from a strong third-quarter earnings report and Berkshire Hathaway’s recent investment.

The rise in the stock did not reflect momentary enthusiasm but a renewed valuation. The market is beginning to price in the fact that Google’s AI strategy is no longer a theory and has commercial, operational and scalable expression. Alphabet is no longer seen as an advertising giant with experimental projects on the side, but as a major infrastructure player in the world of AI with a built-in advantage in hardware, vertical integration, robotics, autonomous systems and a global cloud deployment that is difficult to imitate. While we see a good probability of a short-term pull back after such a strong run, the shares are likely to rise to $360 in the first quarter of 2026 and to $380 by the end of next year.

Under the surface, one of Alphabet’s most undervalued assets has become the TPU. While competitors struggle with GPU shortages and rising modelling costs, Google operates a vertically integrated infrastructure that allows it to train and deploy advanced models at a lower cost. In a world where computational scarcity is becoming a real constraint, investors are realising that this is a big advantage and not a short-term hype.

The latest share price movements of Nvidia and Alphabet suggest that the market appears to be changing its expectations around AI leadership and where investment opportunities lies, pricing in an AI ecosystem where multiple players can thrive.

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