Google’s parent company hit a major financial milestone on Monday, reaching a $4tn valuation for the first time and surpassing Apple to become the second-most valuable company in the world.

Alphabet is the fourth company to hit the $4tn milestone after Nvidia, which later hit $5tn, Microsoft and Apple.

The spike in share price comes after Apple announced it had chosen Google’s Gemini AI model to power a major overhaul of the iPhone maker’s digital assistant Siri, which comes installed in every iPhone. Neither company disclosed how much the deal was worth.

“After careful evaluation, we determined that Google’s technology provides the most capable foundation for Apple Foundation Models,” Apple said in a statement to CNBC.

As tech stocks continue a years-long meteoric rise, fears of a bubble in the stock market persist; however, Wall Street’s excitement for new avenues of investment in AI does as well. Alphabet’s milestones signal a remarkable change in investor sentiment for Alphabet, with its stock surging about 65% in 2025, outperforming its peers on Wall Street’s elite group of stocks, the so-called “Magnificent Seven”.

The tech giant has allayed investors’ doubts about its artificial intelligence strategy in recent months with a series of high-profile product launches, including the latest version of its flagship AI model, Gemini, and the popular Nano Banana image generator and editor. OpenAI, the maker of ChatGPT and Google’s insurgent rival, left investors and consumers underwhelmed with the release of its latest model, GPT-5, which allowed Alphabet to surge ahead.

Google, best known for making the world’s most popular search engine and browser, has also turned its once-overlooked cloud unit into a major growth engine, which drew a rare tech investment from Warren Buffett’s Berkshire Hathaway. Google Cloud’s revenue jumped 34% in the third quarter, with a backlog of non-recognized sales contracts rising to $155bn. Renting out Google’s self-developed AI chips that were reserved for internal use to outside customers has also enabled the unit’s breakneck pace of growth.

Meanwhile, the company’s dominant revenue generator – the advertising business, driven by Google Search and YouTube – has largely held steady in the face of economic uncertainty and intense competition.

The company has faced two landmark US antitrust suits as it has navigated its place in the AI boom. After Google lost the first case, a judge ruled in September against breaking up the company, allowing it to retain control of its Chrome browser and Android mobile operating system.

In the second case, a judge ruled Google had illegally monopolized the online ad market last April. A trial over how to remedy the monopoly began in September, which could see the judge forcing Google to divest parts of its lucrative ads business to foster competition.