On January 24, 2025, Alphabet Inc., the parent company of Google, achieved a significant milestone when its stock closed above $200 for the first time on a split-adjusted basis. The price rose to $200.21, driven by a 1.1% gain on the day and a more than 6% increase since the beginning of the year. This achievement is more than just a symbolic number; it underscores Alphabet’s steadfast commitment to innovation, with artificial intelligence (AI) forming the core of its strategy.

The journey to this milestone began with Alphabet’s 20-for-1 stock split in 2022, a move designed to make its shares more accessible to individual investors. Adjusted for the split, the stock has risen 35% over the past year, far outpacing the Nasdaq Composite’s modest 3.3% rise so far in 2025.

This growth has been fueled by several key factors, particularly Alphabet’s leadership in AI. The company has seamlessly integrated advanced AI capabilities into its portfolio of products while maintaining impressive financial performance. In 2024, Alphabet reported record-breaking third-quarter revenue of $88.3 billion, representing 15% year-over-year growth. CEO Sundar Pichai has emphasized AI as a cornerstone of Alphabet’s strategy, and the results are evident.

Alphabet has positioned itself as a pioneer of AI innovation, setting high standards for the tech world. Its flagship product, Gemini 2.0, a next-generation large language model, was launched last year and now powers services like Google Search and Google Cloud. In addition, forward-looking initiatives such as Project Astra and Project Mariner are refining practical AI applications in ways that capture industry attention.

“Alphabet isn’t just innovating in AI; it’s shaping how AI affects our daily lives,” noted analysts from Morgan Stanley. However, with this leadership comes high expectations. Successfully scaling AI products while ensuring usability remains a critical challenge amid fierce competition. Companies like OpenAI, Microsoft, and Meta continue to push the limits of AI, ensuring the race for dominance stays intense.

Beyond AI, Alphabet’s strides in the cloud computing sector have been another major growth driver. Cloud-related revenue hit record levels in 2024, allowing Alphabet to strengthen its position against Amazon Web Services and Microsoft Azure—two of its primary competitors in the space.

The integration of AI tools with cloud solutions has created unique synergies. Businesses and consumers alike have responded to these offerings, helping Google Cloud carve out a growing share of the rapidly expanding market. This performance isn’t just a side note; it is a cornerstone of Alphabet’s broader strategy to remain a top-tier player in the tech ecosystem.

Despite its success, Alphabet faces challenges. Regulatory scrutiny, particularly regarding AI governance, continues to loom large, with governments around the world grappling with oversight implications. The competitive landscape also remains intense, with companies like Nvidia and Tesla seeing even bigger stock performance gains last year, thanks to advancements in AI-related technology.

Nvidia, for instance, experienced a stunning 132% increase in its stock price in 2024, largely due to its dominance in AI computing chips. Tesla also saw a remarkable 96% jump. While Alphabet’s 35% rise may seem comparatively modest, it still surpassed other tech giants like Apple and Microsoft, reflecting its resilience in a fast-moving market.