Alphabet’s recent focus on artificial intelligence has sent its stock soaring while other major technology companies have slumped. Shares of Google’s parent company soared more than 5% on Monday, adding to last week’s more than 8% rise. Big tech stocks are on track to end November up more than 11%, marking their eighth straight month of wins. GOOGL Million Mountain, Alphabet, 1 Month Wall Street sees Alphabet as having an advantage in building AI models. It is also believed to be separate from the circular trading linked to OpenAI, which has raised alarms in recent weeks about the possibility of a bubble. “Some investors fear that Alphabet will win the AI wars due to significant improvements to the Gemini AI model and continued benefits from custom TPU chips,” Melius Research analyst Ben Reitzes wrote to clients in a note Monday. “A GOOGL win would actually hurt some of the stocks we cover, so be prepared for volatility.” One reason Alphabet’s rally is seen as bad news for other major tech stocks is that Alphabet could dominate at the expense of other companies. “Having one hyperscale winner in AI would be a disaster for almost everyone, especially if it’s Alphabet,” Reitzes said. Before Nvidia jumped 2% on Monday, the stock had fallen nearly 6% last week despite posting big earnings and guidance. The company was expected to end November down nearly 12%. The Round Hill Magnificent Seven ETF (MAGS), which tracks Alphabet, Nvidia and five other mega-tech companies, fell more than 2% last week. The fund is on pace to lose 4% during the trading month. The tech-heavy Nasdaq Composite Index ended last week down more than 2%, bringing its loss since the beginning of the month to about 4%. “After such good news from Nvidia, you may be wondering why nearly all of the AI stocks we cover are selling,” Reitzes said. “There’s one real reason to be concerned, and that’s Alphabet’s ‘AI comeback.'” Reitzes said Alphabet is the most vertically integrated hyperscaler and has a string of successes in hardware, so it doesn’t need to rely on Nvidia, AMD or Arista solutions long term. On top of that, he said the company’s Gemini product could capture AI workloads, resulting in hits for Microsoft, Amazon and Oracle. When it comes to OpenAI, Gemini’s recent momentum has investors concerned that the startup behind ChatGPT is “this generation’s AOL,” he said. Google announced the Gemini 3 model earlier this month. Silicon Valley is also paying attention to Alphabet’s AI advances. Salesforce CEO Marc Benioff told X on Sunday that after two hours with Gemini 3, he has “no intention of going back” to ChatGPT, which he has used every day for three years. “The leap is insane,” Benioff wrote. “Everything is sharper and faster. It feels like the world has changed again.”
