👩🍳 How we use AI at Tech in Asia, thoughtfully and responsibly.
🧔♂️ A friendly human may check it before it goes live. More news here
🧔♂️ A friendly human may check it before it goes live. More news here
Alphabet hits $4t market value on AI optimism
Alphabet reached a market capitalization of over US$4 trillion on January 12, joining a small group of companies that have surpassed this milestone.
Shares in the Google parent rose 1% to close at US$331.86.
Alphabet recently overtook Apple as the second-largest listed company after Nvidia.
Only Nvidia, Apple, and Microsoft have previously crossed US$4 trillion, with Nvidia being the only firm to surpass US$5 trillion.
The stock’s rise followed news of a multiyear deal with Apple to support AI technology in Apple products, including Siri.
Alphabet shares have climbed 6% in 2026, after a surge of over 65% in 2025 that added nearly US$1.5 trillion to its value.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
The AI deal is a vote of confidence, but Alphabet’s valuation assumes flawless execution
- Apple’s multiyear pact names Google’s AI as the “most capable foundation for Apple Foundation Models” (large, general‑purpose AI systems) 1. Google pays Apple over $20 billion each year to stay the default search engine on iPhones 2. Bloomberg said Apple may pay about US$1 billion a year to use Google’s model for Siri 1. Cost sharing across compute plus chips plus power remains murky 3.
- A $4 trillion market cap implies a 28x forward P/E near five-year highs 3. Google Cloud (Alphabet’s cloud computing unit) has a $155 billion backlog that comes from multi‑year reserved AI compute (contracts for future use of computing resources) not revenue today 34. Management guided to $91–93 billion of 2025 CapEx with a larger step‑up in 2026 to build data centers and lock power, so profits hinge on customers using that capacity as planned 3.
- Ironwood Tensor Processing Units (TPUs) position Alphabet against Nvidia, but Apple did not grant exclusivity 51. Apple had also weighed OpenAI and Anthropic as partners, which keeps a multi‑partner path open 6. This adds competition risk.
Infrastructure suppliers should target Alphabet’s 2026 spending wave before capacity tightens
- Executives flagged a bigger 2026 CapEx push on top of $91–93 billion for 2025 3. About two‑thirds goes to Graphics Processing Units (GPUs), Tensor Processing Units (TPUs) plus servers, with the rest to data centers and core infrastructure 4. Developers, utilities, plus fiber operators in Virginia, Texas, and Ontario can pitch now 4. The same applies in Germany, India, and Singapore as suppliers near capacity 4.
- Data center capacity could top 2 gigawatts by late 2026, roughly double today 4. That scale needs renewable power deals plus land. Energy developers and real estate investors can time bids to Google’s schedule to secure better pricing.
- A planned $40 billion Texas build and a global rollout set a steady demand path 7. Makers of cooling plus backup generators plus networking gear can lock supply agreements early. Google’s scale can lead to sole‑source awards (deals awarded to a single supplier).
