Why Alphabet Surged This Week

Shares in the search giant alphabet (GOOG 4.54%) (GOOGL 4.56%) It rebounded this week, rising as much as 10.1% on Thursday before retreating to a weekly gain of 9.2% as of 1 p.m. ET on Friday, according to data from S&P Global Market Intelligence.

This is a big step for a company as large as Alphabet, which has not reported any financial results. But the search giant revealed several positive news from the tech space this week.

Alphabet takes the top position again

On Monday, Alphabet published a blog post about the company’s new quantum computing chip called Willow. According to Alphabet, the new chip was capable of performing a calculation in five minutes that would take today’s fastest supercomputers more time than the universe exists.

On X, Elon Musk responded to the message with just one word:

Wow

– Elon Musk (@elonmusk) December 9, 2024

Even though commercial quantum computing is still years away, Musk’s announcement and confirmation seemed to inspire confidence that Google is still committed to cutting-edge technology.

There were also assurances about more recent innovations in cloud computing and generative artificial intelligence (AI) – two areas where Google is believed to have gotten off to a late start.

This week, sell-side research firms Piper Sandler published the results of its survey of leading chief investment officers. Not only was there more overall optimism about IT spending in 2025, but Google Cloud also gained significant traction in the survey, with several CIOs calling it the “most strategic” cloud for AI.

Then on Wednesday, Alphabet released its latest Large Language Model (LLM), Gemini 2.0., to developers, with a larger release schedule for January. The latest model comes with several innovative features like Project Mariner, which allows AI to take control of your browser to get the job done, just like a human.

Alphabet had its doubters

Alphabet has been the cheapest Magnificent Seven stock for some time as some investors feared its core businesses would be disrupted by generative AI.

However, this threat did not appear in any of Alphabet’s earnings reports, which continued to produce strong search results this year. Meanwhile, this week brought back several reminders that Alphabet’s innovation engine is still best in class.