Why This Alphabet Comeback Is Personal to Me—And Why 2026 Matters

I made a bold call last year: Alphabet was a once-in-a-decade buying opportunity. The market had overlooked the company’s potential, and I believed it would outperform significantly in 2025. If you took that advice and invested at the start of 2025, you’re sitting on roughly 65% gains. That’s not luck—that’s recognizing when the market has mispriced an asset. This comeback is personal because I staked my reputation on it, and I’m not ready to dismiss the stock now that we’re entering 2026.

But here’s the reality: past performance doesn’t guarantee future results, and the investing landscape shifts constantly. So where does Alphabet go from here?

The Valuation Tailwind Is Fading, But Alphabet Still Has Room to Run

The biggest factor driving my 2025 prediction was simple: Alphabet was undervalued. Trading at a significant discount to the S&P 500 and other major tech peers, the company offered asymmetric upside. Investors were skeptical of its position in the generative AI race, which created a perfect opportunity for contrarian investors.

Fast forward to 2026, and that calculus has changed. Alphabet emerged as an AI leader throughout 2025, and the market has taken notice. The stock now trades at approximately 30 times forward earnings—right in line with other big tech names like Microsoft and Tesla. That undervaluation discount? It’s gone.

This doesn’t mean Alphabet is overpriced or a sell. But it does mean the easy gains are probably behind us. In 2025, the stock benefited from multiple expansion (rising from an undervalued state to fairly valued). In 2026, Alphabet will need to drive returns primarily through earnings growth rather than valuation re-rating. The market is much more efficient now, and I don’t expect the stock to deliver the same outsized percentage gains it did last year.

That said, this comeback is personal precisely because I believe in the company’s long-term trajectory. It’s just more nuanced than 2025.

AI Leadership Is Just Getting Started

Here’s where my conviction remains strong: Alphabet’s artificial intelligence dominance is still in its infancy. A year ago, investors viewed the company as an AI laggard, playing catch-up to OpenAI and others. Now, Gemini has become a top-tier choice for serious AI users, and the momentum is accelerating.

But we’re still in the early innings. Most users have barely scratched the surface of what generative AI can do. Features planned for 2026 could be transformative—things we haven’t even considered yet. Gemini’s capabilities will likely expand significantly, and I expect Alphabet to surprise investors with innovations that justify continued outperformance.

Beyond generative AI, there’s quantum computing. Alphabet made impressive strides in this area during 2025, though the true business impact probably won’t materialize until 2030 or beyond. That’s not a concern for 2026, but it adds a layer of optionality to the thesis. When quantum breakthroughs do happen, Alphabet will be positioned to benefit.

My Take on Buying Alphabet Stock Today

So should you buy Alphabet stock right now, in early 2026? My honest answer is nuanced. The euphoria of 2025 has faded, and the stock is no longer a screaming bargain. But it’s not overpriced either—it’s simply fairly valued for a company with tremendous growth prospects.

For existing shareholders: hold. The foundation is solid, the AI opportunity is real, and Alphabet will continue to beat the market, even if not by the astronomical margins of 2025.

For prospective investors: it’s not too late. Yes, you’ve missed some of the initial rally, but this comeback is personal to me because I still believe in Alphabet’s ability to execute over the next 5-10 years. Fair valuation plus strong earnings growth and AI innovation could drive solid double-digit returns annually.

The key is managing expectations. Don’t expect another 65% year. Expect steady, outpaced performance as Alphabet leverages its AI leadership and quantum research to drive long-term shareholder value.