Alphabet’s Ascent: Cramer Foresees Another 20% Surge as AI Dominance Solidifies
In a market showing increasing caution towards high-valuation tech stocks, Jim Cramer is emphatically reiterating his conviction in Alphabet, projecting a potential further 20% appreciation for the tech giant’s shares. Cramer expressed his optimism on Tuesday’s “Squawk on the Street,” stating, “I don’t think Google stops here. I think Alphabet goes straight shot to $400.” This forecast comes as Alphabet’s stock reached a new all-time high of $338 per share on Tuesday, building on a remarkable 65% surge throughout 2025.
While the broader “Magnificent 7” cohort has seen a cooling of investor enthusiasm, with many shifting towards more defensive sectors like industrials, energy, financials, and healthcare, Alphabet continues to capture significant investor interest. “The market has really soured on these big-cap names,” Cramer observed. “The one to own is Alphabet — it goes much higher.” This sentiment is reflected in year-to-date performance, with Alphabet posting a nearly 5% gain, a stark contrast to Meta’s 4.7% decline, Nvidia’s 1.7% drop, and Tesla’s 0.6% slip in early 2025.
The strengthening narrative surrounding Alphabet is largely attributable to its perceived leadership in the generative artificial intelligence space. Recent strategic victories, particularly the multi-year partnership with Apple to integrate Google’s Gemini AI models into Apple products, are poised to substantially boost Gemini’s adoption and cement its position as a leading large language model, rivaling offerings like OpenAI’s ChatGPT. This momentum has propelled Alphabet into the exclusive $4 trillion market capitalization club, joining the ranks of Nvidia, Microsoft, and Apple.
However, for Alphabet’s stock to sustain its upward trajectory, several key factors will need to materialize, according to analysts at Bank of America. The firm highlighted the necessity for Gemini to consistently demonstrate technological superiority, leverage cost advantages derived from its proprietary tensor-processing units (TPUs), and achieve enhanced monetization of its core search business. The prevailing positive sentiment, as noted by Bank of America in a Tuesday investor note, suggests that “the AI cycle is moving in the right direction for Alphabet.”
For investors tracking the Investing Club’s portfolio, the plan is to increase exposure to Alphabet, a position initially established in late December. Given that the stock is currently trading above the club’s cost basis, a strategic approach would be to await a market pullback before initiating further purchases. The Investing Club maintains a price target of $350 for Alphabet shares and assigns a buy rating.
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