CNBC’s Jim Cramer doubles down on Alphabet, arguing that the stock could build on its strong 2025 rally by another 20%. “I don’t think Google will stop here,” Kramer said Tuesday on “Squawk on the Street.” “I think Alphabet will go straight to $400.” Shares of Google’s parent company Alphabet hit another all-time high on Tuesday, rising 2% to $338 a share. The previous record was Monday’s closing price of $334. The stock price rose 65% in 2025. Despite recent stock gains, Alphabet continues to attract investors, even as the broader Magnificent 7 cools. Investors are moving away from high-valuation tech stocks and into more defensive sectors such as industrials, energy, financials and health care. “The market has really cooled down on these large stocks,” Cramer said. “What you should own is Alphabet. It goes above and beyond,” he added. In fact, Alphabet is up nearly 5% heading into early 2025, while Meta is down 4.7% year-to-date, Nvidia is down 1.7%, and Tesla is down 0.6%. GOOGL 1Y Mountain 1-year performance of GOOGL stock. Sentiment toward Alphabet is growing as the company is increasingly seen as a leader in generative AI. The company has achieved a series of important wins, most notably its multi-year partnership with Apple to bring Google’s Gemini AI model to Apple products. This integration is expected to significantly increase Gemini’s usage and solidify its position as the leading large-scale language model against rival ChatGPT. This puts the company in the company of Nvidia, Microsoft, and Apple with a market capitalization of $4 trillion. But for Alphabet stock to continue rising, Bank of America noted that the company needs to hit on several cylinders, including Gemini continuing to demonstrate its technological leadership, cost advantages with its custom tensor processing units (TPUs), and increasing search revenue. Bank of America wrote in a note to investors on Tuesday that the positive story on the stock suggests “the AI cycle is moving in the right direction for Alphabet.” As for the Investing Club portfolio, we would like to add to the Alphabet position we started in late December. The stock is trading above its cost basis, so wait for a rebound before buying more. Alphabet maintains a price target of $350 and a stock rating of 1.
