Alphabet’s recent move on artificial intelligence has sent its shares jumping while other major technology names are floundering. Shares of the Google parent jumped more than 5% on Monday, adding to last week’s more than 8% gain. Big tech’s stock is on track to end November up more than 11%, marking its eighth straight winning month. GOOGL 1M Mountain Alphabet, 1-month Wall Street sees Alphabet as having an edge in building AI models. It is also considered separate from the circular dealmaking associated with OpenAI that has raised alarm around a potential bubble in recent weeks. “Some investors are nervous that Alphabet will win the AI war thanks to major improvements to its Gemini AI model and the ongoing benefits of its custom TPU chip,” Melius Research analyst Ben Reitz wrote in a note to clients on Monday. “A GOOGL win would actually hurt some of the stocks we cover – so prepare for volatility.” One reason why Alphabet’s rise is seen as bad news for other leading technology stocks is that they could dominate at the expense of everyone else. “A hyperscale winner in AI would be the worst thing for almost everyone, especially if it’s Alphabet,” Reitz said. Shares fell nearly 6% last week despite posting blockbuster earnings and guidance, before Nvidia’s 2% pop on Monday. The chipmaker was poised to fall nearly 12% in late November. The Roundhill Magnificent Seven ETF (MAGS) — which tracks Alphabet, Nvidia and five other megacap tech companies — fell more than 2% last week. The fund is on pace to fall 4% in the trading month. The tech-heavy Nasdaq Composite ended last week down more than 2%, bringing its month-to-date loss to nearly 4%. “You may be asking why nearly all the AI stocks we cover are selling off after such good news from Nvidia,” Reitz said. “There is a real cause for concern and that is Alphabet’s ‘AI Comeback’.” Because Alphabet is the most vertically integrated hyperscaler and has many breakthroughs within the hardware, Reitz said it doesn’t need to use long-term solutions from Nvidia, AMD or Arista. On top of that, he said his Gemini product could gain AI workloads, which would result in a hit to Microsoft, Amazon and Oracle. When it comes to OpenAI, Gemini’s recent momentum has investors worried that ChatGPT is “this generation’s AOL,” he said. Google announced its Gemini 3 model earlier this month. Even Silicon Valley is taking note of Alphabet’s AI advancements. Salesforce CEO Marc Benioff said on Sunday X that he’s “not going back” to ChatGPT, which he uses every day, after two hours on the Gemini 3. “Everything is sharper and faster. It’s like the world has changed again.”
Alphabet is growing on the notion that it is winning the AI race on OpenAI. Why it scares many investors
