Google entered 2025 in a rough spot. Despite its stock rising the year before, investors largely saw the tech giant as a runner-up to OpenAI. Today, that story looks completely different. Google is now stealing the show, and OpenAI CEO Sam Altman has reportedly declared a “code red” emergency as his team works to match Google’s new Gemini 3 models’ performance. It is a sharp reversal from 2022, when ChatGPT’s launch forced Google into its own emergency mode to protect its search business.
The search giant is catching up on monthly users and winning big on hardware. In October, Anthropic announced plans to use up to 1 million of Google’s processors to power its software. Reports also suggest Meta is in talks to use Google chips for its own AI products across Facebook and Instagram.
This momentum points to a strong year ahead. Gene Munster from Deepwater Asset Management wrote in a December note that he expects Google to be the best-performing stock of the “Magnificent 7” in 2026. He points out that Google has the complete package right now: a leading model, a rapidly growing user base, and a dominant cloud infrastructure.
The numbers back this up. Google includes AI revenue in its Cloud business, which grew 34% in the third quarter to hit $15.1 billion. During the earnings call, CEO Sundar Pichai revealed that the company signed more billion-dollar deals in that single quarter than in the previous two years combined. He added that over 70% of their existing cloud customers are now using their AI services.
On the consumer side, Google successfully integrated AI into Search, launching a ChatGPT-like “AI Mode” for US users and placing ads within AI summaries. They even scored a viral hit with the Nano Banana image app in August. However, the release of Gemini 3 in November sealed the deal. The model received immediate praise, with tech leaders like Salesforce CEO Marc Benioff announcing he dropped ChatGPT in favor of Google’s new tool.
