May 24, 2024

Image for article titled AI just powered Google to a $2 trillion market cap

Photo: Beck Diefenbach (Reuters)

Google parent Alphabet crossed the $2-trillion threshold for market capitalization on Friday, thanks to a stock surge powered partly by its work with generative artificial intelligence.

The tech giant’s stock was one the market’s star performers on Friday, as Alphabet Class A shares and Alphabet Class C shares each hit new 52-week highs. Both stocks were up about 10% shortly before markets closed, making Google the top performer in the Nasdaq on Friday and one of the top stocks in the S&P 500. That pushed Google’s market cap to about $2.14 trillion on Friday afternoon.

Alphabet stock is up more than 23% so far this year and more than 59% over the last 12 months.

Prior to Alphabet, only Apple, Microsoft, and Nvidia had joined the $2-trillion club. Google’s latest milestone comes following the release of its quarterly results Thursday, which beat analysts’ expectations. The company reported a surge in profits of nearly 60% in the first quarter of this year versus the same period a prior year.

“Our results in the first quarter reflect strong performance from search, YouTube, and cloud,” CEO Sundar Pichai said in a statement Thursday. “We are well underway with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”

Another factor boosting Alphabet stock: its announcement of a first-ever cash dividend of 20 cents per share, to be paid to investors this summer. Alphabet’s sales shot up, too, by 15% to $80.5 billion.

Wall Street thinks Google stock will keep surging after a brief stall in February and March. Analysts from Jefferies, JPMorgan Chase, Bank of America, and Raymond James on Friday all raised their price targets for Google to $200 per share — from previous price targets between $165 and $180 — after Google’s strong earnings report a day earlier.

Laura Bratton contributed to the article

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