Could Alphabet Become the World’s Largest Company

Alphabet (NASDAQ: GOOGL) is already a giant, but it may still be in the early innings of its growth story. With a market capitalization hovering just shy of $3 trillion, it is within striking distance of becoming the world’s next $4 trillion stock.

What makes this more than just speculation is that several potential roadblocks have recently cleared, while multiple growth engines are now firing at once. Let’s dig into why Alphabet has a credible shot at wearing the crown.

Key Points

• The DOJ ruling preserved Alphabet’s dominance across Chrome, Android, and Apple’s Safari.

• With revenue up 32% and operating income doubling, Alphabet’s custom AI chips (TPUs) and rapid adoption of Gemini/Vertex AI give it a unique advantage.

• YouTube is capturing TV ad budgets, Waymo is scaling robotaxis in new markets, and Alphabet’s advances in quantum computing position it for future breakthroughs.

Search Advantage Strengthened

The Department of Justice’s antitrust case loomed over Alphabet for years, raising the possibility it might lose its exclusive deals with Apple or be forced to spin off Chrome and Android.

That didn’t happen.

Instead, the ruling largely preserved Alphabet’s distribution advantage. Over two thirds of the global population uses Chrome, and Android powers about three-quarters of the world’s smartphones.

Few realize how sticky those positions are. Studies show that fewer than 5% of users ever change their default search settings, which means Alphabet retains a near-permanent seat at the gateway of the internet.

Add Apple’s Safari default search partnership worth an estimated $20 billion a year to Apple, according to court filings and you see just how entrenched Google Search is.

Interestingly, AI has been a tailwind, not a threat. More than 2 billion people are already using Google’s AI Overviews every month. And with “AI Mode,” users can toggle seamlessly between traditional results and chatbot-style responses, keeping traffic within the Google ecosystem.

Google Cloud’s Breakout Moment

Alphabet’s cloud business has long been seen as an underdog to Amazon and Microsoft, but that perception is changing quickly. Google Cloud grew revenue by almost a third last quarter, while operating income more than doubled. It’s now the most profitable business inside Alphabet outside of Search.

And most miss the fact that Alphabet has a hardware edge. Its custom Tensor Processing Units (TPUs), built to accelerate AI training and inference, allow it to compete on both cost and performance. These chips are optimized for Google’s TensorFlow framework but increasingly attract developers building on its Gemini AI models and Vertex AI platform.

The company recently boosted its capital expenditures budget by $10 billion, taking it to $85 billion, largely to expand data center capacity.

Valuation and the Road to $4 Trillion

Despite hitting all-time highs, Alphabet’s valuation remains surprisingly modest. Shares trade at about 21x next year’s earnings estimates. If Alphabet were simply re-rated in line with peers, its market cap would already be near $4 trillion.

Another under-the-radar development is that Alphabet and Apple are rumored to be negotiating a deal to integrate Google’s Gemini AI into Siri.

If finalized, it would represent one of the most high-profile endorsements of Alphabet’s AI leadership to date, and a lucrative licensing deal layered on top of its existing search revenue.

The Bottom Line

Alphabet has been written off before when Facebook’s social ads exploded, when Amazon’s cloud dominated headlines, and more recently, when OpenAI threatened to displace search. Yet each time, the company has not only defended its position but emerged stronger.

If its multiple rerates alongside its earnings growth, the leap to $4 trillion could come sooner than most investors expect.