NEW YORK, January 12, 2026, 12:05 EST
- Alphabet shares climbed following Apple’s decision to integrate Google’s Gemini AI into the redesigned Siri set to launch later this year
- This multi-year deal tightens the bond between the tech giants amid an intensifying AI race
- Investors are debating if strong AI gains can balance out growing expenses and tightening regulations
Alphabet shares edged higher Monday after the Google parent announced Apple will integrate its Gemini AI models into a revamped Siri under a multi-year agreement. In midday New York trading, Alphabet’s Class A shares climbed about 0.4% to $329.74. 1
The deal embeds Google’s AI more firmly into consumer gadgets just as investors demand evidence that hefty AI investments are driving real-world adoption, beyond flashy demos. It also expands Alphabet’s opportunity to market tools and cloud computing to developers leveraging those models.
Apple’s installed base is the prize, and Google takes the spot beneath it. A joint statement revealed Apple chose Gemini, saying, “After careful evaluation, Apple determined that Google’s AI technology provides the most capable foundation for Apple Foundation Models,” which are the large models powering their apps and services. 2
Alphabet shares climbed to a record peak above $334 earlier, then pulled back slightly. Apple shares rose roughly 0.6% to $260.95.
The rally briefly lifted Alphabet’s market value above $4 trillion, driven by investor enthusiasm over what they view as a clear win with its Gemini product. Last week, Alphabet surpassed Apple in market cap for the first time since 2019, Reuters reported. 3
The deal drops amid a tangled battle over who controls the smarts behind consumer AI. Alphabet squares off against OpenAI for prime positioning, while Apple has woven ChatGPT into several of its software offerings.
In late 2024, Apple integrated ChatGPT into its devices, enabling Siri to use the chatbot for specific tasks related to photos and documents. Reuters reported that Monday’s announcement brought no significant updates to this setup.
The fresh AI deal adds to a well-established, profitable tie: Google is the default search engine on Apple devices. This setup has long drawn regulatory scrutiny and continues to be a critical driver of services revenue for both firms.
Phil Blancato, CEO of Ladenburg Thalmann Asset Management, called Alphabet “the one name that has surprised us all” among the Magnificent 7 stocks, Wall Street’s nickname for the largest U.S. tech giants. He pointed out that Alphabet has been “making inroads beyond their traditional model.”
Alphabet has doubled down on Google Cloud in its AI push, even renting out its own AI chips to external clients. Reuters noted that the cloud division’s revenue surged 34% in Q3, while its backlog—the value of signed but unrecognized contracts—climbed to $155 billion.
Some investors see Waymo as a longer-term play on Alphabet’s stock, despite it not boosting earnings in the near term. Investors Business Daily noted that major mutual funds continue to increase their Alphabet holdings, highlighting Waymo as a potential catalyst for more upside. 4
That said, the Apple deal leaves key challenges unresolved. Alphabet must prove it can profit from AI services without undermining its lucrative ad business—the core revenue driver. It also runs the risk of regulators stepping in over the growing alliance between two tech giants.
