After watching shares of Alphabet (GOOG) (GOOGL) soar, Deepwater Asset Management highlighted that Google’s AI has had significant breakthrough wins that have accounted for the return of investor confidence in the company’s upside for 2026 and beyond.
Analyst Gene Munster and his team emphasized that the search business has exceeded expectations, with the AI experiences resulting in consumers wanting additional information, adding to query growth. Notably, Google is expanding ads below and within the AI response. Deepwater’s testing supports the view that monetization increased measurably over the past three months, which bodes well for 2026.
Also working in its favor, Nano Banana has become a viral sensation over the last few months, and Gemini 3 has leapt ahead of GPT. “Few would have thought six months ago that Gemini would emerge as a threat to GPT. That reality set in at OpenAI, resulting in early December comments that the company was in a code red given the strength of competition from Gemini,” highlighted the firm.
Looking ahead, Google entered the agentic commerce market, announcing checkout inside AI Mode and launching new AI Mode ad units, including Direct Offers, along with a partnership with Walmart (WMT) to begin rolling out the new formats. Finally, during the past week, it became official that Apple (AAPL) picked Gemini to power the upcoming new Siri, which displaced GPT.
Shares of Alphabet (GOOG) (GOOGL) are up 80% over the last six months, which is the 6th best return in the Nasdaq 100 over the period.