TLDR
- Alphabet’s market cap hit $3.6 trillion, overtaking Microsoft’s $3.5 trillion for the first time since August 2018
- Google stock surged 59% in 2025, outperforming Microsoft’s 11% gain and the S&P 500
- Strong Q3 earnings and a favorable federal antitrust ruling fueled investor confidence
- Warren Buffett’s Berkshire Hathaway bought 17.8 million Alphabet shares worth $4.3 billion in Q3 2025
- Google maintains 89-93% control of global internet search market
Google’s parent company achieved a major milestone on Friday. Alphabet surpassed Microsoft in market capitalization for the first time in over seven years.
Alphabet stock climbed 2.8% in midday trading. This pushed the company’s market cap to $3.6 trillion.
Microsoft shares fell 1.3% during the same session. The drop brought its valuation to $3.5 trillion.
The last time Google held a larger market cap than Microsoft was August 30, 2018. Nvidia and Apple remain the only U.S. companies worth more, ranking first and second respectively.
The shift reflects Google’s strong performance rather than Microsoft’s weakness. Microsoft stock has gained 11% year-to-date, matching the S&P 500’s returns.
Alphabet has delivered far stronger results. The stock has jumped 59% in 2025, making it one of the year’s top performers among mega-cap tech companies.
Strong Earnings and AI Drive Growth
Multiple factors powered Alphabet’s rally this year. Third-quarter earnings beat analyst expectations across key metrics.
The company’s new Gemini AI model generated enthusiasm among investors. Google Cloud revenue surged 25% year-over-year in the September quarter.
The cloud division now produces over $60 billion in annual revenue. This growth helped offset concerns about AI disrupting Google’s search business.
A federal antitrust ruling also provided relief. The decision against Google could have been much harsher, according to market analysts.
Alphabet stock weathered the fall AI selloff better than competitors. Shares gained 23% since early October while the S&P 500 declined.
Buffett Backs Google with $4.3 Billion Investment
Warren Buffett made a major bet on Alphabet during the third quarter. Berkshire Hathaway purchased 17.8 million Class A shares worth $4.3 billion.
This represents one of Buffett’s largest recent stock purchases. The Alphabet position now accounts for 1.6% of Berkshire’s invested assets.
The move came as Buffett reduced Berkshire’s Apple stake by 74% over two years. He sold 41.7 million Apple shares in Q3 alone.
Google controls 89% to 93% of global internet search. This dominance has held steady since 2015 despite competition from AI chatbots.
Alphabet holds $98.5 billion in cash and marketable securities. The company generated $112.3 billion in operating cash flow through the first nine months of 2025.
Alphabet trades at a price-to-earnings ratio of 27. Analysts project annual sales growth of 13% to 14% for the company.
Apple’s next target sits at $3.9 trillion. If Alphabet maintains its 2025 momentum, that gap could close quickly in 2026.
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