Alphabet Stock Rises After $3 Trillion Market Cap Milestone. Why It Can Keep Going.

Alphabet, parent company of Google, crossed a $3 trillion market capitalization on Monday. (Justin Sullivan/Getty Images)

Alphabet stock continued to rise Tuesday after the tech behemoth became the fourth company to surpass a $3 trillion market capitalization.

The Google parent crossed the $3 trillion mark for the first time on Monday, becoming the fourth company to do so along with Apple, Microsoft, and Nvidia. Shares ended the session up 4.5%, helping bring Alphabet to a market cap of $3.05 trillion.

The gains came as Citi Research analysts reiterated a Buy rating on the stock and boosted their price target to $280 from $225, implying 11% upside to Monday’s closing price. They cited “greater clarity around its legal and regulatory challenges.”

Earlier this month, a judge in Google’s antitrust case ruled that the company wouldn’t have to divest its Chrome browser and could continue paying Apple to make it the default search provider on its devices. While Judge Amit Mehta declared Google “a monopolist” and ordered the company make several concessions, it avoided the worst case scenario.

“Google’s product velocity is ramping amid greater clarity around its legal and regulatory challenges in what we believe is a relatively healthy online advertising market,” Citi analysts wrote. “More specifically, we believe Gemini’s tools, capabilities, integration (across Google’s products), and adoption continues to expand across Google’s product halo and Google’s size and scale give it an inherent advantage.”

In April, a different judge found Google guilty of operating illegal monopolies over two advertising markets. The remedy portion of the trial is slated to begin Sept. 22.

While Citi conceded that the company’s legal woes are ongoing, “the Trump administration is more favorable to big business and more inclined towards deregulation,” the firm wrote. Conversations with a lawyer indicate there could be “less aggressive litigation going forward.”

Alphabet shares continued to rise on Tuesday following the market cap milestone. The stock gained 0.6% to $253.02 while peer Meta Platforms rose 0.6% and futures tracking the benchmark S&P 500 index were up 0.1%.

Also bolstering the gains was the announcement that Google would pledge £5 billion, or around $6.80 billion, to artificial intelligence development in the U.K. over the next two years.

The announcement came ahead of President Donald Trump’s U.K. state visit this week. As part of the commitment, the company will open a $1 billion data center in Waltham Cross, some 12 miles outside London, on Tuesday.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com