A core pillar of our investment in Google owner Alphabet took shape on Monday. Membership Club Name Apple has selected Gemini, Google’s AI model, to power the artificial intelligence capabilities of Siri and other major products later this year. The multi-year partnership to integrate Gemini into Apple’s foundational models, confirmed in an Apple statement obtained by Jim Cramer, represents an important validation of Google’s AI capabilities. “Gemini is the winner,” Jim told “Squawk on the Streets” on Monday, adding that Apple “after a fair review decided Google was the best choice.” Alphabet stock rose more than 1.5% on the news, hitting an all-time high of $334 per share. The stock briefly joined the $4 trillion market cap club before falling from the day’s highs. Apple shares rose just 0.5% on the Gemini news. Alphabet surpassed Apple’s market cap last week for the first time since 2019, and continued to do so on Monday. This huge technology partnership shows that Google’s Gemini is leaving a dominant footprint in the AI wars. This supports why we initiated our position at Alphabet in late December. While we pulled back early last year over concerns that Google was losing ground to OpenAI’s ChatGPT, Gemini’s rapid evolution, particularly its latest iteration and most intelligent model in Gemini 3, has reversed the situation. Alphabet’s Gemini is more than just a chatbot, it’s a reasoning engine built to process information the same way humans do. This is the news that Jim previewed to investment club members in his first Sunday Thoughts article of the year. “Gemini3 will soon solidify its dominance with a deal with Apple that will make it the sole source of AI content, reaching 1.5 billion users. What will happen to other companies, including OpenAI?” On January 4, he wrote that Alphabet is “the best-positioned hyperscaler, with the best and most accurate site Gemini 3 and the best business model, thanks to the creative way it works with Google.” Strengthening the partnership will also be beneficial for Apple as it aims to build an AI strategy. Jim said the stock has been “hugely disappointing since the start of the year”, citing investor concerns over declining services revenue. In fact, Apple is an odd company among the mega-cap tech crowd given its lack of a clear AI roadmap. This is the main reason the company underperformed the overall market last year. A big concern among investors is that by not providing the AI features that would motivate people to buy the latest iPhones, people will continue to use older phones for longer. But after speaking with Eddie Cue, Apple’s senior vice president of services, Jim realized that the company’s services division was “incredibly strong.” Wall Street is also taking a positive view. Wedbush’s Dan Ives wrote in a note to investors that he believes Monday’s news is “gradually positive for both AAPL and GOOGL.” Ives called it “an important moment of validation for Google as the best foundational model and as a stepping stone for Apple to accelerate its AI strategy into 2026 and beyond.” Jim reiterates his “I own it, don’t trade” stance on Apple, and we maintain our $300 price target and 2 price rating. As for Alphabet, the price target is $350 and the stock rating is 1. (Jim Cramer’s charitable trust is long AAPL, GOOGL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
