Alphabet Overtakes Apple in Market Value After 7 Years... AI Strategy Pays Off

Alphabet's Market Cap Reaches $3.88 Trillion
Becomes Second-Largest U.S. Company After Nvidia

Alphabet, Google's parent company, has surpassed Apple's market capitalization for the first time since 2019. Analysts say that the gap in competitiveness surrounding artificial intelligence (AI) is directly reflected in the companies' valuations.

Google and Apple logos. Photo by Reuters and Yonhap News Agency

On January 7 (local time) in the New York stock market, Alphabet closed at $321.98 per share, up 2.43% from the previous trading day. As a result, Alphabet's market capitalization was calculated at $3.88 trillion.

In contrast, Apple fell 0.77% on the same day, with its market capitalization dropping to $3.84 trillion. With this, Alphabet overtook Apple in market capitalization for the first time in seven years, becoming the second-largest company by market cap in the United States after Nvidia.

Market observers point to the success of Alphabet's AI strategy as the main reason for this reversal in market capitalization. Alphabet has accelerated its recovery in AI competitiveness, emerging as one of the most closely watched stocks on Wall Street in 2025. At the end of last year, Google drew global attention in the AI market with its self-developed 7th-generation Tensor Processing Unit (TPU) chip "Ironwood" and its latest generative AI model "Gemini 3." Notably, Gemini 3 has been recognized for outperforming OpenAI's ChatGPT, and Ironwood was used to train this model.

On the back of these achievements, Alphabet's stock price surged 65% over the course of 2025. This is the highest annual increase since 2009, when the stock doubled following the financial crisis.

Sundar Pichai, CEO of Alphabet and Google, also emphasized that the company is actively responding to surging demand. In an earnings call last October, he announced that Google Cloud had secured contracts worth $1 billion (1.45 trillion won) by the third quarter of 2025, which is more than the combined total of the previous two years.

In contrast, Apple is widely seen as lagging behind in the AI race. Apple had planned to unveil its next-generation AI assistant, Siri, last year, but has postponed the launch to 2026. This stands in stark contrast to the current market trend, where Microsoft and Alphabet are leading the intensified AI competition following the release of ChatGPT.

Wall Street's outlook on Apple has also turned somewhat negative. Investment bank Raymond James downgraded its investment rating on Apple this week, stating that the company's potential for stock price growth in 2026 is likely to be limited.