Yes – Alphabet’s rally has solid foundations in earnings growth, cloud momentum, and AI integration, but its sustainability will depend on whether broader market concentration triggers a correction. Google’s stock is up 9.2 percent over the past month, adding $123 billion in value after a favourable court ruling, and analysts now project double-digit revenue and earnings growth through 2026. This strength suggests further upside is possible, though the sheer dominance of US tech – now worth $22.7 trillion and 40 percent of the S&P 500 – means risks are amplified if sentiment turns.
Key takeaways
- Alphabet stock jumped 5 percent on 2 September 2025 after a court confirmed it would not have to sell Chrome.
- Market cap closed at $2.57 trillion, with a 9.2 percent gain over the past month.
- Google Cloud revenue rose 32 percent year over year in Q2 2025, outpacing Microsoft Azure and Amazon Web Services.
- Alphabet’s EPS forecast for 2025 is $10, up 24.4 percent year over year, with positive revisions in the last month.
- The top 10 US stocks together equal 40 percent of the S and P 500, an all-time high.
Google Chrome ruling sparked a rally
Alphabet’s September rally was sparked by regulatory relief. Investors had feared a forced divestiture of Chrome, which would have weakened Google’s integrated ecosystem. The favourable ruling cleared that risk, restoring confidence in Alphabet’s ability to defend its market share across Search, YouTube, and Ads.
Source: TradingView
Alphabet earnings forecast adds to the optimism
The company’s fundamentals are reinforcing this optimism:
• Earnings momentum: EPS is projected at $2.33 for the current quarter (+9.9 percent YoY) and $10 for fiscal 2025 (+24.4 percent YoY). Estimates have been revised upward in recent weeks, a positive signal historically correlated with near-term price strength.
• Revenue trajectory: Q3 2025 revenue is forecast at $84.53 billion (+13.4 percent YoY). For the full year, Alphabet is expected to generate $334.62 billion in sales, rising to $375.31 billion in 2026 (+12.2 percent).
• Cloud growth: Google Cloud’s 32 percent YoY growth in Q2 makes it the fastest-expanding among the top three cloud providers. Alphabet is scaling capital expenditure in 2025 to meet accelerating AI-driven demand for cloud services.
• AI integration: CEO Sundar Pichai highlighted that AI is “positively impacting every part of the business.” Google Search is seeing adoption of AI Overviews and AI Mode features, advertisers are reporting higher conversion rates from AI tools, and YouTube has rolled out Veo, an AI-powered text-to-video platform.
Alphabet’s diversified portfolio positions it uniquely: Search and Ads remain core profit engines, Cloud is a high-growth vertical, YouTube is being reshaped by AI tools, and Waymo provides long-term optionality in the autonomous ride-hailing space.
US tech stocks are now valued at $22.7 trillion
The scale of US tech concentration is historic. With a combined market cap of $22.7 trillion, the top 10 US companies now outsize the entire Chinese and EU stock markets. The top five alone – Nvidia, Microsoft, Apple, Alphabet, and Amazon – are collectively larger than every non-US market in the world.
Source: S&P Global, Nasdaq,
Analysts say this dominance reflects the transformative impact of technology on the global economy. But it also heightens systemic risks. With 40 percent of the S&P 500 tied to just 10 names, investor exposure is heavily concentrated in a narrow group of megacap stocks. International markets are increasingly dwarfed, underscoring a global capital imbalance. And while dominance can sustain momentum during growth cycles, it also raises the possibility that a shock to any of these companies could ripple far more widely than in the past.
Bull case for Google
• Earnings revisions are rising, historically linked to continued share price momentum.
• Diversification across Search, Ads, YouTube, and Cloud creates multiple growth engines.
• AI adoption is accelerating monetisation in advertising and content creation.
• Regulatory clarity from the Chrome ruling reduces uncertainty.
Bear case for Google
• US megacap concentration leaves markets vulnerable if sentiment shifts.
• Ongoing regulatory scrutiny, especially around AI and antitrust, could re-emerge.
• Macroeconomic risks – higher-for-longer interest rates, inflationary pressures, and stagflation fears – may compress tech valuations.
• Competitors, particularly Microsoft and Amazon in the cloud, pose continued pressure.
Market impact and scenarios
Alphabet is only 20 percent away from the $3 trillion mark, putting it in direct contention to join Apple, Microsoft, and Nvidia in the $3T club. Amazon and Meta are also contenders, with AI acting as the common driver.
If current trends hold, Alphabet could hit $3 trillion as soon as 2026. However, if regulatory or macro headwinds materialise, the high concentration of market power could amplify downside risks. For now, momentum and earnings upgrades are supportive, but the rally is tied closely to broader confidence in US tech.
Disclaimer:
The performance figures quoted are not a guarantee of future performance.
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