Google closed out 2025 as the strongest stock on Wall Street, outperforming every other trillion-dollar tech company, including Nvidia and Microsoft.
he stock surged by 65% for the year, making it Google’s best yearly performance since 2009 after a brutal first quarter that saw Google’s stock drop 18%, according to data from CNBC.
Broadcom and Nvidia have rallied by 49% and 39% YTD, respectively. Skeptics had been circling Google for months, questioning whether it could keep up in a world driven by AI. ChatGPT and Sora, both OpenAI products, were pulling users away from Gemini, and then advertisers started testing new ways to reach users in a space filled with AI chatbots and agents.
Google’s globally-dominating search model was under pressure, and the company’s ability to stay relevant was being challenged on all fronts.
Gemini app, Nano Banana, and AI hires drive recovery
In April, Google appointed Josh Woodward, who had been with the company for 16 years, to lead the Gemini app, and his team pushed out Nano Banana in August, a feature that allowed users to create AI-generated images by blending multiple photos into a single digital creation.
The feature went viral, and by the end of September, Gemini had processed over 5 billion images, surpassing ChatGPT on Apple’s App Store.
That same summer, Google signed a deal with Varun Mohan, CEO of AI coding startup Windsurf, and hired several of his top engineers. Windsurf had previously been in acquisition talks with OpenAI for $3 billion.
Those talks collapsed, and Google stepped in, agreeing to pay $2.4 billion in licensing fees and compensation to secure the engineering talent. That move added critical AI depth to its team at a time when the pressure was on to innovate quickly.
Court ruling, Gemini 3, and growing search revenue add fuel
In September, U.S. District Judge Amit Mehta handed Google a legal win despite the company being found guilty of running an illegal monopoly in internet search last year.
Mehta ruled against the Justice Department’s harshest proposals, meaning Google wouldn’t be forced to spin off Chrome or stop making payments to have its apps preloaded. The company can still pay Apple billions to keep its search engine the default option on iPhones. However, it now has to share some data with competitors as part of the ruling.
In November, Google released Gemini 3, just eight months after Gemini 2.5. Usage is still behind ChatGPT, but it’s catching up. This month, Gemini reached 18% of generative AI traffic, up from 5% a year ago, while ChatGPT fell to 68% from 87%.
Analysts at Citizens noted that the real value isn’t just Gemini itself but the impact on core search, where the company has embedded AI-powered summaries under a feature called AI Overviews.
“The incorporation of updated models is improving the relevance of answers,” said the analysts, who also said they believe Google can grow search revenue in Q4 2025. They kept a buy recommendation on the stock.
Analysts also pointed to strength in Google Cloud, which is competing directly with Amazon and Microsoft. They flagged the Waymo division and its robotaxi operations as another area that could keep investors interested into 2026.
Expectations are already high. LSEG estimates that Google will report Q4 revenue over $111 billion, a 15% jump from last year. Revenue growth next year is expected to stay in the low teens.
In October, Alphabet raised its 2025 capital spending forecast to $93 billion, up from $85 billion. Analysts at FactSet expect it to climb to $114 billion in 2026. CEO Sundar Pichai told investors on the October earnings call that Google Cloud signed more billion-dollar deals in the first three quarters of 2025 than in all of 2023 and 2024 combined.
Still, not everyone’s relaxed. Analysts at Pivotal Research said that if OpenAI runs into financial problems or cuts spending, the ripple effect could hit the entire AI sector, including Google. But they’re not pulling back. Pivotal raised their Google price target by $50 to $400, which is 28% above Wednesday’s close of $313. “
We believe the shakeout, if it happens, will mirror 2000,” they wrote, “and will inevitably be a healthy weeding out process leaving fewer, much more dominant competitors, with GOOG leading the way.”
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