Google's Gemini 3 Launch: Beyond the Hype

Alphabet's stock (GOOGL and GOOG) saw a near 6% surge on Monday, November 24, 2025, following the launch of Google's Gemini 3 AI model. Both GOOGL and GOOG crossed the $300 threshold, hitting an intraday high of $317.75. Google Alphabet stock price today: Alphabet shares surges 6% as Google roars back in AI — is Nvidia’s reig - The Economic Times The initial market reaction is undeniably positive, but let's dissect the numbers before we declare victory.

The headlines are screaming about Gemini 3 outperforming OpenAI and Anthropic. Analysts are tripping over themselves to raise price targets to the $325-$355 range. But what's fueling this optimism? Alphabet's Q3 pretax profit rose 39% year-over-year, and margins expanded seven points. Impressive, no doubt. But that's pretax. Capital spending also jumped from $13 billion to $24 billion. The net profit increase, while still positive, isn't quite as dazzling. (Always look at the net, folks.)

Google Cloud is a major talking point, with revenue growing 34% in Q3, surpassing Microsoft Azure's 33% and Amazon AWS's 20% growth. This is where the narrative gets interesting. While Google Cloud is growing faster, it still only holds 13% global market share compared to AWS at 29% and Azure at 20%. It's like a sprinter gaining ground in a marathon – impressive, but they still have a long way to go. The projections of $75 billion in Google Cloud revenue by 2026 are ambitious, but rely on continued growth at this accelerated pace. Are those projections baked into these new price targets? Probably. Should they be? Debatable.

Gemini usage has expanded to 650 million monthly users, and its generative AI web traffic share rose from 5.6% to 13.7% in one year. Now, here’s a crucial point often glossed over: What constitutes "usage"? Is it active, engaged use, or simply a fleeting visit driven by novelty? The traffic numbers alone don’t tell us about the depth of user interaction or the long-term retention rates. And this is the part of the report that I find genuinely puzzling. We're seeing impressive traffic gains, but the quality of that traffic remains an open question.

The Market's Verdict and Berkshire's Bet

Wall Street remains strongly bullish, with an average forecast of $321.94. Berkshire Hathaway has invested $4.34 billion in Alphabet, adding further weight to the bullish sentiment. But let's not forget that the market can be a fickle beast. Sentiment can shift on a dime based on factors entirely unrelated to a company's fundamentals. Herd mentality is a powerful force, especially in tech stocks.

Alphabet has gained 70% in the past year, and its year-to-date gain is nearly 59%. In the past decade, Alphabet shares have climbed 653% (as of Nov. 14, 2025). These are staggering numbers. But past performance is not indicative of future results. (A classic disclaimer, but one worth repeating.) Alphabet now trades at 26 times earnings, up from 20 times last year. This higher multiple reflects increased expectations, which means the pressure is on to deliver even stronger results going forward. Analysts expect Alphabet stock to grow at a compound annual rate of 16.7% between 2024 and 2027. Can they maintain that pace?

Google Search revenue grew 15% and still contributes 55% of overall revenue. So, while everyone is focused on AI and cloud, the bread and butter is still search. A 15% growth in search revenue is nothing to scoff at, but it also highlights Alphabet's reliance on a mature business. The question is, can Gemini and Google Cloud truly diversify Alphabet's revenue streams and drive sustainable growth in the long term, or will they simply be incremental additions to the existing empire?

The Bull Run Might Be a Bit Overcooked

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A Reality Check

The market's exuberance over Gemini 3 is understandable, but a healthy dose of skepticism is warranted. Alphabet's future hinges on its ability to translate impressive technological advancements into tangible, sustainable financial results. The risk is not in Gemini's potential, but in the market's potentially inflated expectations.

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