Alphabet Joins $2 Trillion Club as Results Show AI Strength

Alphabet Inc. closed decisively above a $2 trillion market capitalization for the first time on Friday, as a powerhouse earnings report reassured investors that the Google parent would be a major player in artificial intelligence.

The stock rose 10% to $171.95, its biggest one-day jump since July 2015, resulting in a valuation of $2.15 trillion. The advance added almost $200 billion to the company’s market capitalization, making for one of the largest single-day value adds in stock market history. Shares have risen 23% this year, compared with the 5.3% gain of the Nasdaq 100 Index.

The $2 trillion milestone followed the company’s results, where revenue beat expectations on the strength of its cloud-computing unit. Cloud demand was fueled by growth in AI, while Alphabet also cheered investors by introducing a dividend and announcing a $70 billion buyback program.

alphabet closes above 2 trillion

“Alphabet is tremendously well managed, its free cash flow is absolutely astonishing, and it has a massive R&D budget, so while no one knows what company will have the best AI products, this is a tough one to bet against,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services.