Alphabet has outperformed the other “Magnificent Seven” stocks significantly this year with a 64% gain.
Yet, even today, it’s the second-cheapest stock among the group.
On the back of its improved AI offerings, Alphabet could have another year of outperformance in 2026.
10 stocks we like better than Alphabet ›
While the market is on pace for a strong 2025, most of the stocks in the “Magnificent Seven” merely had good, not fantastic, years. But one Magnificent Seven stock clearly took the crown in 2025: Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).
GOOG Year to Date Total Returns (Daily) data by YCharts.
As you can see, Alphabet’s 64% return trounced the rest of the Magnificent Seven, beating 2025’s second-best performer, Nvidia (NASDAQ: NVDA), by a whopping 33 percentage points and most of the others in the group by more than 50 points.
Here’s how Alphabet did it and why the rally may very well continue into 2026.
Coming into the year, Alphabet had been a notable laggard, with its valuation reflecting considerable fear, uncertainty, and doubt in the age of generative artificial intelligence (AI). As a result, Alphabet began the year at the lowest valuation of the group. At one point, its price-to-earnings (P/E) ratio even touched the high teens — below the average valuation of the S&P 500.
Yet, as you can see, even with this year’s vast outperformance, Alphabet retains the second-lowest P/E ratio of the group at 30.6 times trailing earnings, barely beating out Meta Platforms.
GOOG PE Ratio data by YCharts. PE Ratio = price-to-earnings ratio.
The primary concern entering the year was that AI chatbots might eventually disrupt Google Search, which is still Alphabet’s largest profit center. It’s also true that, early in the year, Google Search showed a concerning deceleration in paid clicks. Yes, there was still growth, but by the first quarter, paid click growth had fallen to just 2%, with concerns that it might eventually go negative.
However, on its second-quarter earnings, Alphabet began to prove…
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