Alphabet Inc. (NASDAQ: GOOG), the parent company of Google, saw its Class C shares surge on Friday, rising 2.77% to $174.51 on the Nasdaq. This marks a notable rebound for the tech giant after months of underperformance in 2025, and reflects a renewed sense of optimism surrounding the company’s AI initiatives and long-term fundamentals.
The rally comes after Alphabet shares had slumped nearly 9% year-to-date, making it one of the weaker performers among major tech stocks this year. However, momentum appears to be shifting as investors digest new developments related to Alphabet’s artificial intelligence strategy. The company’s performance over the past five days shows a 3.23% gain, and over the past month, Alphabet stock is up 5.06%—suggesting a potential recovery trend may be underway.
One of the key drivers behind this renewed investor confidence is growing attention on Google’s Veo3 AI video generation platform, which has been described as a potential game-changer in the generative AI space. CNBC’s Jim Cramer recently highlighted Veo3 as a major reason Alphabet was able to “save” its most recent earnings quarter, emphasizing the tool’s potential to help Alphabet maintain leadership in AI development while expanding its commercial reach.
Still, analysts remain divided. While some praise Alphabet’s innovation, others remain cautious about the speed and scale of AI monetization. Cramer noted that despite the technological advantage, questions remain about how quickly Google can translate research into profit. He added that Alphabet’s AI rollout may be “too expensive” without clearer short-term revenue impact.
In addition to AI, investors are closely watching Alphabet’s position in the search market, especially its multi-billion-dollar agreement with Apple to remain the default search engine on iOS. That deal is facing increasing regulatory scrutiny, and any disruption could impact Google’s advertising dominance, which remains its largest revenue source.
Despite short-term uncertainty, Alphabet’s long-term performance continues to impress. Over the past five years, the company has delivered a gain of 146.93%, and since its IPO, Alphabet’s Class C shares have returned over 516%. While 2025 has so far been a challenging year, Friday’s rally is a reminder that Alphabet remains one of the most strategically positioned tech companies in the world—especially as AI, cloud computing, and digital advertising continue to shape the next wave of tech innovation.
As the market awaits Alphabet’s next earnings call and updates on its AI monetization strategy, the company’s recent stock performance suggests that investors are beginning to look beyond short-term headwinds and focus once again on its long-term potential.