Alphabet (GOOGL) Stock: Buy, Hold, or Sell in 2026?

Alphabet’s Momentum: Can the Tech Giant Sustain Success into 2026?

Alphabet (GOOG +1.60%) (GOOGL +1.47%) experienced a remarkable 2025, emerging as a top-performing stock adn demonstrating resilience in a rapidly evolving tech landscape. The question now is whether the company can maintain this trajectory as key catalysts from the previous year fade.

Alphabet’s stock soared by over 60% in 2025, securing its place among the top 30 performers in the S&P 500. While not reaching the heights of the top 10, analysts emphasize that this achievement is particularly impressive given the company’s substantial size. “For a company of Alphabet’s scale, a 60% increase is a notable feat,” one analyst noted.

The company benefited from a series of favorable developments in 2025, including a positive outcome in a monopoly court case and its ascent as a leader in generative AI. However, these tailwinds are largely absent heading into 2026, prompting investors to seek new reasons for optimism.

Here are three key factors that suggest Alphabet could continue to thrive, alongside one potential challenge that could derail its progress.

Pro tip – Alphabet’s dual-class stock structure gives insiders voting control, perhaps shielding the company from antagonistic takeovers and short-term pressures.

Alphabet’s Core Business Remains Strong

Despite concerns about the potential disruption of generative AI, Google Search remains the cornerstone of Alphabet’s success. The integration of AI-powered search overviews, offering a blend of traditional and generative AI results, has proven effective in maintaining market share and capitalizing on a robust advertising market.

In the third quarter of 2025, Google Search revenue increased by 15% year-over-year – a strong performance for a mature business unit. “When Alphabet’s core business thrives,the entire company benefits,” a company release stated. Continued strong performance from Google Search throughout 2026 will be crucial for sustaining investor confidence.

Reader question – Google’s “Other Bets” division, including Waymo and Verily, remains unprofitable. Continued investment in these ventures is a key risk for investors.

Google Cloud Capitalizes on the AI Boom

Google Cloud is rapidly becoming a significant growth driver for Alphabet. The demand for cloud computing is fueled by two primary trends: the ongoing migration of traditional workloads to the cloud for cost and efficiency benefits, and the surge in demand for computing power to support artificial intelligence applications.

Google Cloud’s revenue jumped 34% year-over-year in Q3 2025, positioning it as one of Alphabet’s fastest-growing segments.Investors anticipate this growth rate will continue into 2026 as AI adoption accelerates.

Did you know? – Sundar Pichai is Alphabet’s CEO and also serves as the CEO of google,streamlining decision-making and strategy across the company.

A Potential New Revenue Stream: TPU Sales

Alphabet’s success in cloud computing is partly attributable to its custom-designed AI chips, Tensor Processing Units (TPUs). These chips offer a performance and cost advantage over traditional graphics processing units (GPUs) for specific AI workloads.

Currently, access to TPUs is limited to Google Cloud customers. However, reports indicate that Alphabet is exploring a potential partnership with Meta Platforms to sell TPUs directly, potentially creating a new and substantial revenue stream. This move could considerably enhance alphabet’s market position and appeal to investors.

Valuation Concerns Loom large

Despite its strong performance, Alphabet’s stock is no longer considered undervalued. Following its impressive run in 2025, the stock currently trades at nearly 30 times forward earnings – a premium valuation.