Alphabet’s Unstoppable Momentum: AI and Cloud Fuel Record Rally

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The parent company of Google appears unstoppable, with its shares charting a steep upward trajectory. As the stock flirts with all-time highs, having surged nearly 50% since the start of the year, investors are grappling with a pivotal question. Has the market already priced in the full potential of its artificial intelligence ambitions, or is this rally just beginning its next powerful phase?

A wave of bullish sentiment from major financial institutions is providing the core fuel for this ascent. Leading Wall Street firms have significantly revised their valuation models upward in recent days, driven by a shared belief that Alphabet's strategic bets on AI and cloud computing are paying off decisively.

Arete Research stands out with particular optimism, raising its price target to $380. The firm highlights the accelerated integration of the Gemini AI into Google Search and Android as a substantial competitive edge. This move was echoed by peers; Guggenheim lifted its target to $375, while HSBC set a $370 objective. The consensus from market experts is unambiguous: accelerating growth necessitates revised forecasts.

Cloud Division Emerges as Powerhouse

This confidence is rooted in concrete performance data from Q3 2025, not mere speculation. The Google Cloud segment has solidified its role as the primary growth engine. Revenue there jumped 34%, but the forward-looking metric is even more compelling. The division's contract backlog has ballooned by 46% since January to a colossal $155 billion.

To sustain this pace, the company is committing massive capital. Planned investments for the full 2025 year exceed $90 billion, focused predominantly on AI infrastructure and its proprietary TPU chips. This aggressive spending also represents a direct challenge to Nvidia's hardware dominance for internal workloads.

A Note of Caution Amid the Rally

However, the picture isn't uniformly bright. "Smart money" activity presents a mixed signal. Although certain hedge funds, such as Entropy Technologies, are aggressively building their stakes, corporate insiders have been sellers. Over the past 90 days, executives including CEO Sundar Pichai disposed of shares worth approximately $50 million.

Valuation metrics also suggest much future success is already reflected in the share price. With a price-to-earnings (P/E) ratio now above 31, the stock carries a premium. Investors maintaining their positions can, at least in the near term, anticipate the dividend payment scheduled for December 15.

Currently trading at €272.00, the shares hover just below their 52-week peak of €279.70. While the upward trend remains firmly intact, the runway for further dramatic gains may be shortening.