Alphabet has emerged as Wall Street’s AI frontrunner, a sharp reversal from a year ago when investors viewed Google as lagging behind rivals led by OpenAI. The shift follows a series of strong AI-driven results that have repositioned the company as an industry leader.
Executives struck a notably confident tone on Alphabet’s latest earnings call, the first since the release of Gemini 3, a model that has boosted user engagement and accelerated Google’s progress in artificial intelligence.
Chief Executive Sundar Pichai said the company is seeing AI investments translate into tangible revenue growth across both consumer and enterprise segments, reinforcing the commercial impact of its technology push.
The Google Gemini app has now surpassed 750 million monthly active users, up from 650 million in the prior quarter. While that still trails ChatGPT’s reported user base, Pichai noted significantly higher engagement per user following the Gemini 3 launch.
Gemini has also been embedded into Google Search through “AI Mode” and into enterprise products, helping the paid enterprise version reach 8 million licenses, a key milestone for monetization.
Investors initially balked at Alphabet’s rising capital expenditure outlook, sending shares down in after-hours trading. Sentiment quickly reversed, however, after Google Cloud posted 48% revenue growth, easing concerns over returns on AI spending.
By contrast, scrutiny has intensified around companies closely tied to OpenAI, including Microsoft and Oracle, as investors question the sustainability of OpenAI-linked spending. Alphabet’s strong balance sheet and recent infrastructure deals with Meta and Apple have reinforced the view that Google currently holds the upper hand in AI.
