What Happened?

Shares of online advertising giant Alphabet (NASDAQ: GOOGL) jumped 4.5% in the afternoon session after investor enthusiasm surged over its new Gemini 3 artificial intelligence (AI) model and a significant cloud infrastructure contract with NATO. 

Excitement built around the Gemini 3 AI model after reports noted it outperformed rivals from OpenAI and Anthropic. The positive view was boosted when Salesforce's CEO, Marc Benioff, praised the new model. This AI success was supported by Google's use of its own custom chips, which lessened its reliance on other suppliers. 

Adding to the momentum, Google Cloud secured a multi-million dollar deal with the NATO Communication and Information Agency (NCIA). This was seen as a major win for the company's booming cloud segment, which already posted strong revenue growth.

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What Is The Market Telling Us

Alphabet’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 3.3% on the news that the stock's positive momentum continued as legendary investor Warren Buffett's Berkshire Hathaway disclosed a new $4.9 billion stake in the company, and Google launched Gemini 3, its most advanced artificial intelligence model. 

The investment from the famed value investor signaled strong faith in the tech giant's future in artificial intelligence and helped counter growing fears of an AI bubble. Adding to the positive news, Google debuted its updated AI model, Gemini 3, which executives described as a "massive jump" in reasoning and coding ability. The new model was made available immediately across Google’s major products, including its core search engine. This dual news helped ease previous concerns about AI's impact on search revenue, with an analyst from Loop Capital upgrading the stock and noting the search business looked "as healthy as ever.".

Alphabet is up 66.7% since the beginning of the year, and at $315.74 per share, has set a new 52-week high. Investors who bought $1,000 worth of Alphabet’s shares 5 years ago would now be looking at an investment worth $3,580.

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