Alphabet’s AI Ambitions Fuel Record Share Performance

Alphabet Inc. enters the new year with significant momentum, building on a robust 2025. A clearly articulated artificial intelligence strategy is generating fresh optimism among investors. This foundation for future growth extends beyond software and cloud services, increasingly encompassing proprietary semiconductor development and securing the energy supply for computationally intensive applications. The critical question for markets is the durability of this multi-pronged approach.

The cloud segment continues to be a primary growth engine. For the third quarter of 2025, Google Cloud revenue increased by 34% year-over-year to $15.2 billion. The Google Cloud Platform (GCP) is expanding at a notably faster rate than the overall segment, driven by enterprise AI solutions that already contribute billions in quarterly revenue.

Key metrics highlight this accelerating dynamic:
* The number of new GCP customers grew by nearly 34% year-over-year in Q3 2025.
* The contract backlog surged by 82% to $155 billion.
* More than 70% of Google Cloud customers are now using AI-powered products.
* In the first nine months of 2025, the company secured more contracts valued above $1 billion than in the previous two years combined.

These figures demonstrate that AI is functioning as a pervasive revenue catalyst across the entire cloud business, not merely a technological initiative.

Hardware and Partnerships: Broadening the AI Infrastructure Play

Parallel to software, proprietary hardware is gaining substantial strategic importance. A pivotal development in October 2025 was Alphabet's multi-billion dollar agreement with Anthropic, the developer of the Claude AI model. The deal grants Anthropic access to up to one million of Alphabet's custom-designed Tensor Processing Units (TPUs), underscoring the strong market demand for Google's in-house AI chips.

Reports also indicate Alphabet is exploring the potential sale of TPUs to Meta Platforms Inc. Such a move would significantly broaden the company's AI monetization strategy, transitioning from a focus purely on software and cloud services toward becoming a comprehensive infrastructure provider for the industry.

Acquiring Power for the AI Era

The rapid expansion of AI and cloud computing presents a formidable challenge: enormous electricity consumption. To address this structural issue head-on, Alphabet announced the acquisition of U.S. renewable energy developer Intersect Power for $4.75 billion in cash. The transaction is expected to close in early 2026.

This acquisition secures not only the Intersect Power team but also ongoing projects and infrastructure relevant to data center operations. The move is a direct response to soaring energy needs; in 2024, Alphabet's global operations consumed 30.8 terawatt-hours of electricity—double the amount used in 2020.

Should investors sell immediately? Or is it worth buying Alphabet?

Intersect Power manages a portfolio of energy projects exceeding 10.8 gigawatts, a capacity more than twenty times greater than the power output of the Hoover Dam. The agreement encompasses:
* Solar energy and battery storage projects.
* Joint infrastructure initiatives with Google.
* Access to new energy generation technologies.
* A development pipeline of over 10.8 GW, including the 828-megawatt-peak TX Lumina solar project.

This strategic purchase lays the groundwork for Alphabet to sustainably power its AI and cloud data centers with its own renewable energy sources long-term.

Investor Confidence and an Operational Milestone

Alphabet continues to attract strong interest from the investment community. "The Insiders Fund" reiterated its bullish stance, citing the company's dominant market position and its ambition to be a driver of technological transformation rather than a follower. Hedge fund ownership data shows 186 funds held Alphabet shares at the end of Q3 2025, up from 178 in the prior quarter.

Operationally, the conglomerate achieved a landmark: for the first time, its Q3 2025 revenue surpassed the $100 billion threshold in a single quarter. This milestone cements the company's position within the elite tier of global technology firms.

AI as a Cross-Business Catalyst

The influence of AI now permeates multiple business segments. Within Google Search, features like "AI Overviews" and an "AI Mode" are enhancing user engagement and creating new monetization pathways. Concurrently, Alphabet is making aggressive investments to expand its TPU capacity to meet soaring demand from both customers and partners.

This positive momentum is clearly reflected in the company's equity performance. Over the past twelve months, Alphabet's share price has appreciated approximately 70%, reaching a new 52-week high of $315. The stock trades comfortably above key moving averages, indicating a sustained upward trend.

The central challenge for the coming months will be whether Alphabet can continue to seamlessly integrate its AI software, custom chip hardware, rapidly growing cloud division, and secured energy supply into consistent revenue and earnings growth, mirroring its successful trajectory throughout 2025.