I Called Alphabet's Monster Comeback in 2025. Here's Where I Think It's Heading in 2026.

By Keithen Drury – Jan 22, 2026 at 6:15AM ESTKey PointsAlphabet's valuation rose throughout 2025.Alphabet emerged as a generative AI leader in 2025.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: GOOGLAlphabetMarket Cap$4.0TToday's Changeangle-down(2.01%) $6.46Current Price$328.46Price as of January 21, 2026 at 3:58 PM ETAlphabet's stock crushed the market in 2026.Last year, I called Alphabet (GOOG +1.93%) (GOOGL +2.01%) a "once-in-a-decade opportunity." I believed the stock was severely undervalued and that it could catch up in the artificial intelligence race in 2025. I nailed that prediction, and if you invested in Alphabet stock at the start of 2025, you're up around 65%. But it's 2026 now, and investing is more about future performance than past performance. So, where is Alphabet stock going to head next? Image source: Getty Images. Some of the tailwinds from Alphabet's rise are gone One of the biggest tailwinds I pointed out in my 2025 prediction was Alphabet's undervaluation compared to the market (as measured by the S&P 500 (^GSPC +1.16%)) and other big tech stocks. There were a few factors contributing to Alphabet's undervaluation, namely its position in the generative AI landscape. However, Alphabet emerged as a leader throughout 2025, and that undervaluation is no longer the case. Data by YCharts. Now, Alphabet trades for 30 times forward earnings, about the same price as other big tech peers. As a result, I don't think Alphabet will be able to deliver the same level of impressive returns in 2026 as it did in 2025, partly because the stock's valuation would get too expensive. However, I still think it's a great investment opportunity.Advertisement Alphabet's AI dominance is still emerging Alphabet entered 2025 with investor perceptions that it was an AI laggard, but now it's viewed as an AI leader. Gemini has quickly emerged as a top option for those who use AI regularly, and investors are taking note. There's still plenty of room for its generative AI dominance to expand, so I think Alphabet has plenty of ground to gain in this area. Furthermore, investors haven't even touched the capabilities of generative AI, and some features that could be unveiled in 2026 may be real game-changers. Another factor why I listed Alphabet as a once-in-a-decade opportunity was its quantum computing research. Alphabet made further progress in 2025 in this area, although investors likely won't see its true impact on the business until at least 2030. There is still quantum computing-related upside to Alphabet's stock, which makes the stock worth hanging on to. For 2026, I think Alphabet will continue to beat the market, but it won't be by a monstrous amount like it was in 2025. As a result, it's still a great stock to hold on to, and if you don't own any shares, it's not too late to buy now.Read NextJan 21, 2026 •By Adam SpataccoA Once-in-a-Decade Investment Opportunity: 1 Magnificent Artificial Intelligence (AI) Stock to Buy in 2026 and Hold Forever (Hint: It's Not Nvidia)Jan 21, 2026 •By Keith SpeightsA Once-in-a-Decade Investment Opportunity: 3 Quantum Computing Stocks to Buy and HoldJan 20, 2026 •By Keithen DruryWarren Buffett Sent a Clear Multibillion-Dollar Message About Artificial Intelligence That Investors Shouldn't IgnoreJan 20, 2026 •By Geoffrey SeilerI Predicted Alphabet Would Be the Best-Performing "Magnificent 7" Stock in 2025. Here Are the Main Reasons Why It Actually Happened.Jan 20, 2026 •By John BallardWhat Is One of the Best Tech Stocks to Hold for the Next 10 Years?Jan 19, 2026 •By Keithen Drury2 Stocks to Buy in 2026 and Hold ForeverAbout the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedAlphabetNASDAQ: GOOGL$328.46 (+0.02%) $+6.46S&P 500 IndexSNPINDEX: ^GSPC$6875.62 (+0.01%) $+78.76AlphabetNASDAQ: GOOG$328.38 (+0.02%) $+6.22*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.Advertisement