Prediction: This Artificial Intelligence (AI) Stock Will Be Worth $5 Trillion by the End of 2026

Key Points
This AI leader is seeing strong momentum in its cloud computing infrastructure and services business.
AI is also improving results for its other business operations, producing revenue growth acceleration.
Analysts may be underestimating its earnings growth, but it could hit $5 trillion even if results are merely in line with expectations.
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Investor excitement around artificial intelligence (AI) has added trillions of dollars in capital to a handful of businesses over the last few years. However, many of the biggest AI stocks have seen their values stagnate over the last few months as the market reassesses the value created by all the AI spending taking place. The markets ultimately reward management execution and financial results.
One of the biggest tech companies in the world looks poised to see strong growth across multiple segments of its business, fueled by advances in artificial intelligence in 2026. Ultimately, that could lead the stock to climb to a $5 trillion valuation by the end of the year. Here's why I think Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) stock price will climb 35% from here to reach that milestone.
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Alphabet's revenue growth is headed toward the clouds
Alphabet saw a dramatic acceleration in its cloud computing revenue in the fourth quarter, when sales increased 48% year over year. That growth was driven by AI infrastructure demand as well as AI services demand.
Selling infrastructure is straightforward. Alphabet offers graphics processing unit (GPU) access to developers looking to train or use large language models on its servers. Alphabet differentiates its product with its custom Tensor Processing Units (TPUs), which have garnered a lot of interest recently.
That's thanks, in part, to demand from Anthropic, as well as Alphabet's own advancements in AI trained and run on TPUs. Even Meta Platforms is using Alphabet's TPUs for some of its AI work, despite developing its own custom AI accelerators. If more of Alphabet's workload shifts from GPUs to lower-cost TPUs, it could benefit Alphabet's operating margin, which has already seen significant improvements over the last few years.
Alphabet's AI services are based on its Gemini models, which have rapidly caught up with those of OpenAI and Anthropic. That's boosted demand for its Vertex AI platform and Gemini APIs, which enable customers to build and deploy generative AI applications and agents using its foundation models. The growth of AI services should also bolster Alphabet's profit margin for the cloud computing business.
I expect Alphabet to continue showing progress on both fronts. As mentioned, Alphabet's TPUs are attracting significant interest from leading AI developers. Meanwhile, Apple is set to license Alphabet's Gemini for a revamped Siri, which will boost revenue over the coming years.
AI is driving growth across the business
While many companies tout the product improvements enabled by generative AI, Alphabet is one of the few that are seeing meaningful financial effects from integrating more advanced AI across its core products.
While many analysts expected chatbots from OpenAI, Anthropic, and Perplexity to cut into Google Search volume, the opposite has occurred. Search saw more usage in the fourth quarter than ever before, management said during itsearnings callin January. That's the result of features like AI Overviews and AI Mode, which provide generative AI responses to search queries. That leads to more engagement as users ask Google more complex questions. AI has also enabled more ways to search, including voice and images.
Advances in the Gemini model have enabled Google to better understand search intent, improving its ad targeting capabilities and leading to higher monetization rates. Generative AI also helps marketers develop and test new ad campaigns and specific ad copy across Google's properties, including YouTube.
As a result, Alphabet has seen Google Search revenue growth accelerate throughout 2025, and that trend should continue as its AI capabilities improve in 2026. That could get a boost if management decides to monetize its Gemini app directly with ads. It counted 750 million monthly active users as of January.
YouTube is getting a boost from the aforementioned ad creation and targeting capabilities that have also benefited Search. But creators in select countries also have access to AI tools that help provide background images and music, assist with editing, or suggest ideas for video titles or script outlines. That ultimately increases the amount of content on the platform and makes it more engaging. Access to those features remains limited, but I expect Alphabet to expand them as inference costs come down and monetization improves.
Finally, Alphabet is showing very good progress with Waymo, its self-driving car business. The robotaxi service now provides 400,000 rides per week, up from 150,000 rides per week at the end of 2024. It's currently serving 10 cities, and rapidly expanding to new cities in 2026, with 21 more coming soon.
Alphabet's path to $5 trillion
Alphabet is currently worth about $3.7 trillion as of this writing. For it to reach $5 trillion, its value will have to climb 35% by the end of the year. But that's possible, because the stock currently trades for a very attractive valuation.
Investors can buy the stock for about 26 times forward earnings expectations. As mentioned, Alphabet's cloud computing business grew 48% year over year in the fourth quarter and has multiple catalysts that could support continued growth in 2026. Meanwhile, its core ads business is firing on all cylinders and accelerating revenue growth, reaching 14% growth last quarter. Combined with margin expansion, Alphabet is set to produce excellent earnings growth in 2026.
Analysts currently model just 7% earnings-per-share growth, which may be too conservative. But those forecasting out to 2027 expect earnings growth to accelerate to 16% next year, reaching $13.41. If that average 2027 earnings estimate remains stable throughout the year, Alphabet stock would have to trade at a multiple of 31 times forward earnings for it to be worth $5 trillion. Considering the growth across its entire business, that seems like a fair price to pay for the stock. But I think it's likely that Alphabet will continue to impress throughout 2026 and 2027 as earnings estimates move higher, lowering the bar for Alphabet to reach the $5 trillion milestone.
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Adam Levy has positions in Alphabet, Apple, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms and is short shares of Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.