Alphabet's 160% rally in a year reflects value of owning 'most of the stack' in AI

Sundar Pichai, chief executive officer of Alphabet Inc., during the Bloomberg Tech conference in San Francisco, California, US, on Wednesday, June 4, 2025. David Paul Morris | Bloomberg | Alphabet briefly passed Nvidia by market cap in after-hours trading this week, a remarkable feat for a company that was seen as deeply at risk in the early days of the artificial intelligence boom. The stock is up about 160% in the past year, driven higher by an emerging view on Wall Street that Google is well positioned across the AI landscape, whether it's from the company's homegrown models, its massive distribution network or its cloud unit that's reeling in cash from other booming AI businesses. Among tech's seven other trillion-dollar companies in the U.S., chip designer Broadcom is the next best performer over the past 12 months, with its stock up 107%. "Google is one of the two best-positioned AI companies because they own most of the stack," said Gene Munster, managing partner at Deepwater Asset Management. "Chips, models, infrastructure and distribution. On top of that, they're nicely profitable." The other company he put in that category is Elon Musk's SpaceX, which merged with xAI in February in a deal valued at $1.75 trillion. Following Alphabet's earnings report last week, JPMorgan analysts called the stock their "top overall pick" in the tech sector, pointing to a "standout quarter," accelerating growth and a cloud backlog that nearly doubled to $462 billion. …