Alphabet, the parent company of Google, once rose 4.8%, reaching a market value of $3 trillion

On Monday, Alphabet, Google's parent company, saw its stock price rise by as much as 4.8% to $252.41, surpassing the significant market capitalization threshold of $3 trillion. Since the low in April, the company's stock price has soared over 70%, adding approximately $1.2 trillion in market value during this period. This is the latest sign of improved investor confidence in the company.

Alphabet has joined the club of companies with a market capitalization exceeding $3 trillion. Currently, only Nvidia, Microsoft, and Apple have surpassed this level.

The recent surge in Alphabet's stock is driven by a highly anticipated antitrust ruling — a ruling that avoided the most severe measures sought by regulators, including the requirement to sell Alphabet's Chrome browser. This ruling came shortly after Alphabet released its second-quarter earnings report, which showed that demand for artificial intelligence products is driving the company's sales growth.

Earlier on Monday, Citigroup analyst Ron Josey significantly raised Alphabet's target price from $225 to $280, citing that "as the adoption of Gemini accelerates in advertising and cloud services, the product development cycle is speeding up."

In a report to clients, Josey wrote:

This trend is emerging "against a clearer backdrop of its legal and regulatory challenges, and we believe the current online advertising market is relatively healthy."

Despite competition in Google's search business, we believe Google is executing better across its suite of products, with stronger demand and improved profitability.

The above comments reflect Wall Street's generally positive attitude toward Alphabet. Among analysts tracked by Bloomberg, over 80% recommend buying, although this percentage is lower than that of Nvidia, Microsoft, Amazon, and Meta, which have buy recommendation rates close to or exceeding 90%.

Alphabet is still considered relatively cheap among major tech stocks. Its stock price is only 22.5 times estimated earnings, slightly above its 10-year average but still below the Nasdaq 100 index's level of about 27 times. Among the "Seven Sisters of Technology," Alphabet's valuation is second only to Meta, which has an estimated price-to-earnings ratio slightly below 22 times.

However, some analysts point out that Alphabet's stock price may struggle to maintain its previous pace of increase. Its 14-day relative strength index (RSI) is close to 90, a multi-year high, and well above 70, which is typically considered overbought in technical analysis. Alphabet's current trading price is also significantly above the average target price set by analysts, creating the largest historical gap