This article first appeared on GuruFocus.

Alphabet (NASDAQ:GOOGL) continues to strengthen its position in artificial intelligence as a new multi-year partnership with Apple (AAPL) adds fresh momentum to its growth narrative. The agreement, announced earlier this week, will see Google’s Gemini models and Google Cloud technology power Apple’s next generation of AI features, including enhancements to Siri.

The deal arrives as Alphabet’s market capitalization moves past the $4 trillion mark, placing it just behind Nvidia (NASDAQ:NVDA) and reinforcing its role as a major beneficiary of the ongoing AI investment cycle. Investors have closely watched how large technology companies turn heavy AI spending into tangible returns, and Google has made steady progress across both advertising and cloud businesses.

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Gemini’s expanded reach through Apple’s iOS ecosystem could significantly improve distribution and monetization, especially among higher-spending iPhone users. While Gemini already integrates deeply with Android and Chrome, access to Apple’s installed base offers a broader funnel for paid subscriptions and enterprise adoption. This shift also supports rising demand for Google Cloud infrastructure, including its in-house Tensor Processing Units.

The partnership adds another layer of earnings visibility for Alphabet at a time when peers such as Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Amazon (NASDAQ:AMZN) face increasing scrutiny over AI returns. Google’s advertising segment remains its primary cash generator, but AI-driven cloud growth helps diversify earnings and reduce reliance on cyclical ad spending.

OpenAI competition and regulation remain, however, quite large threats; the Apple-Gemini deal means that Alphabet is about to combine enormous size with cautious monetising strategies. Investors are already watching the outcome of this and hoping that future earnings will receive a boost as more people (both consumers and businesses), embrace the use of AI.

Based on the one year price targets offered by 58 analysts, the average target price for Alphabet Inc is $321.50 with a high estimate of $400.00 and a low estimate of $185.00. The average target implies a downside of -4.31% from the current price of $335.97.

Based on GuruFocus estimates, the estimated GF Value for Alphabet Inc in one year is $230.87, suggesting a downside of -31.28% from the current price of $335.97. gf value is gurufocus’ estimate of the fair value that the stock should be traded at. it is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business’ performance. For deeper insights, visit the forecast page.