Alphabet Stock Surges 4.8%, Market Cap Exceeds 3 Trillion USD

On Monday, the stock price of Alphabet, the parent company of Google, surged by 4.8%, reaching 252.41 USD, pushing its market capitalization above the significant 3 trillion USD mark. This surge marks a 70% increase from its April low, adding approximately 1.2 trillion USD to its market value. This development is seen as a clear indication of improved investor confidence in the company.

With this latest surge, Alphabet has joined an elite group of companies with a market capitalization exceeding 3 trillion USD, alongside Nvidia, Microsoft, and Apple. The recent rally in Alphabet's stock price has been driven by a highly anticipated antitrust ruling that avoided the most severe measures sought by regulators, including the potential sale of Alphabet's Chrome browser. This ruling came on the heels of Alphabet's second-quarter financial report, which revealed that demand for its artificial intelligence products is fueling sales growth.

Earlier on Monday, Citigroup analyst Ron Josey significantly raised Alphabet's target price from 225 USD to 280 USD, citing the accelerated adoption of Gemini in advertising and cloud services, which is speeding up the product development cycle. This sentiment reflects a generally positive outlook on Alphabet among Wall Street analysts, with over 80% recommending a buy, although this percentage is lower than that for Nvidia, Microsoft, Amazon, and Meta, which all have buy recommendations close to or exceeding 90%.

Among the major tech stocks, Alphabet is still considered relatively affordable. Its stock price is at 22.5 times estimated earnings, slightly above its 10-year average but below the Nasdaq-100 index's level of approximately 27 times. Within the "tech seven sisters," Alphabet's valuation is second only to Meta, whose estimated price-to-earnings ratio is slightly below 22 times.

However, some analysts caution that Alphabet's stock price may struggle to maintain its previous rate of increase. Its 14-day relative strength index (RSI) is nearing 90, a multi-year high and significantly above the 70 level, which is typically considered overbought in technical analysis. Additionally, Alphabet's current trading price is substantially higher than the average target price set by analysts, creating the largest historical gap.