Alphabet (GOOGL) made headlines this month with the release of its new AI model, Gemini 3, and began selling its in-house custom AI chip, Ironwood, to the broader market. These updates mark a step forward in the company’s push to grow its AI business across both consumer tools and enterprise services.
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Gemini 3 is now the latest version of Alphabet’s AI model, which the company says is more accurate and easier to use than previous releases. The model powers features across Google Search, Gmail, YouTube, and the Gemini app. Alphabet launched Gemini 3 shortly after the release of Gemini 2.5, which had already improved speed and output quality. The company also introduced an upgraded image tool, Nano Banana Pro, that supports more advanced image generation.
Ironwood, the company’s seventh-generation tensor processing unit, is also drawing attention. Alphabet says Ironwood is nearly 30 times more power efficient than its first version from 2018. The chip is used to train and run large AI models and is now being offered to cloud clients. Alphabet’s chip business has helped it attract major enterprise deals, including new partnerships with AI companies like Anthropic (PC:ANTPQ).
Meanwhile, GOOGL shares declined 1.08% on Wednesday, closing at $319.95. Still, the stock is up nearly 70% Year to date.
Cloud Growth and AI Integration
Alphabet also continues to expand its cloud business. In the third quarter, the company reported revenue of over $100 billion for the first time, driven in part by demand for AI tools. Its cloud division reached a $155 billion backlog, which reflects signed client deals not yet fulfilled. The company is also integrating Gemini into workplace tools like Docs, Meet, and Sheets.
According to analysts, Alphabet’s full-stack AI strategy may give it an edge. This includes building its own chips, running AI on Google Cloud, training on data from YouTube, and deploying models in products used by both consumers and businesses. These factors could help lower costs and improve performance across services.
Alphabet’s new releases also come as other tech companies raise spending on AI. Meta Platforms (META), Microsoft Corporation (MSFT), and Amazon (AMZN) have each increased capital spending to support cloud and AI growth. Altogether, the four companies expect to spend over $380 billion this year.
Investor Reaction and Market View
Besides Alphabet’s hardware and software releases, investor interest was also boosted after Berkshire Hathaway (BRK.A) (BRK.B) disclosed a $4.3 billion stake in Alphabet during the third quarter.
Even so, Alphabet still faces strong competition. Nvidia Corporation (NVDA) currently controls over 90% of the AI chip market and continues to release new models. Meanwhile, OpenAI and Anthropic remain active in improving their own language tools. While Alphabet’s AI tools are growing in reach, OpenAI’s ChatGPT app still leads in weekly users.
Is Google Stock a Buy?
Google still holds the backing of the Street’s analysts, with a Strong Buy consensus rating. The average GOOGL stock price target stands at $312.00, implying a 2.48% downside from the current price.
