Why was Alphabet the best Magnificent Seven stock in 2025?

Alphabet achieved a 64% return in 2025, outperforming peers due to AI advancements that boosted Google Search and a turnaround from a low initial valuation.

How did AI impact Alphabet's stock performance in 2025?

AI features like AI Mode and AI Overviews revitalized Google Search, leading to reaccelerated paid click growth and significantly contributing to Alphabet's stock surge.

Was Alphabet considered expensive at the start of 2025?

No, Alphabet began 2025 as the cheapest Magnificent Seven stock, with its valuation reflecting earlier market concerns about generative AI.

Home / Business and Economy / Google's Parent Crowned 2025 Stock Star

Google's Parent Crowned 2025 Stock Star

15 Dec

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Summary

Alphabet's 64% return significantly outperformed Magnificent Seven peers.
AI advancements revitalized Google Search paid click growth.
The company entered 2025 as the cheapest Magnificent Seven stock.

Alphabet (NASDAQ: GOOG, GOOGL) significantly outpaced its Magnificent Seven peers in 2025, delivering an impressive 64% return. This performance was largely driven by strategic AI integration, which revitalized its core Google Search product. Entering the year with a low valuation, the company defied market concerns about AI disruption.

The reacceleration of Search paid clicks, from a mere 2% in the first quarter to 7% by the third, signaled a successful turnaround. This resurgence coincided with the rollout of AI Mode and AI Overviews, enhancing user engagement with Alphabet's homegrown large language models.

Despite its stellar performance, Alphabet retains one of the lowest price-to-earnings ratios in the group, suggesting continued potential for growth. This strategic execution and valuation made it the standout stock of 2025, attracting attention even from investors like Warren Buffett.