On Monday, Google’s parent company, Alphabet, became the fourth company to reach a market value of $3 trillion, and every member of this exclusive club has something in common.
All it took was a rather small 4% rise in shares for the tech giant to hit the coveted stock market benchmark. Rather unsurprisingly, the three previous winners of that title—Nvidia, Microsoft, and Apple—are all titans of the tech industry that have been riding the wave of investor interest in AI, as well.
Alphabet stock had a great start to September after a federal judge concluded earlier this month that the tech giant could keep Chrome despite its monopoly in internet search. The judge’s reasoning for that was that generative AI would eventually pose “a meaningful challenge to Google’s market dominance.”
Google is trying to get ahead of that “meaningful challenge” by fusing AI into its search engine and pouring billions into developing its AI offerings, including its own AI chatbot Gemini.
It seems that investment cashed out for the company. As of Monday morning, Google Gemini is now the number one free app on Apple’s App Store, relegating OpenAI’s ChatGPT to number two status and giving the much-needed push to the company’s stock.
The AI hype is inextricably and intricately linked to the significant stock market returns that these tech giants, and many others, have experienced this year. The trillion-dollar question: Is there an AI bubble?
AI hype driving major gains
The best example of AI hype delivering trillions of dollars of financial gain is perhaps Nvidia, the ultimate AI darling of the stock market. Due to its immense market share in AI chips and the meteoric rise it experienced thanks to the technology, the company is largely considered the face of the AI hype.
Earlier this summer, Nvidia made history as the first company to ever hit $4 trillion market valuation.
Apple, considered the least AI-savvy of the four companies to breach the $3 trillion benchmark, was the first company to ever be worth $3 trillion but is still yet to hit $4 trillion. Meanwhile, both Nvidia and Microsoft have outperformed Apple and already reached that milestone. Microsoft’s breach of the $4 trillion benchmark was also thanks to AI.
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