Google parent Alphabet achieved a significant milestone, reaching a market capitalization of $3 trillion for the first time on Monday. This historic valuation was primarily propelled by renewed investor enthusiasm for artificial intelligence technologies and a crucial favorable antitrust ruling that alleviated major concerns regarding its core business operations.

The company's Class A shares climbed 3.8% to $250, while Class C shares saw a 3.7% increase to $250.4, both marking record highs. Alphabet's stock has demonstrated exceptional performance this year, rallying over 32% and outperforming all other "Magnificent 7" stocks, as well as the broader S&P 500, which gained 12.5%. This places Alphabet alongside tech giants Apple and Microsoft in the exclusive $3 trillion valuation club, though still behind AI chipmaker Nvidia, which boasts a $4.25 trillion market cap. The broader Wall Street rally has been significantly fueled by technology and AI-linked stocks, driven by growing expectations of interest rate cuts by the U.S. Federal Reserve, further amplified by positive forecasts from companies like Oracle.

A pivotal factor contributing to Alphabet's ascent was a U.S. court's decision earlier this month, which permitted the company to retain control over its essential Chrome browser and Android mobile operating system. This ruling was critical, as Google's dominance in search and mobile ecosystems has long been under intense scrutiny. While the judgment necessitates sharing data, which could benefit advertising rivals, the avoidance of divesting Chrome or Android eliminated a significant concern for investors who consider these platforms integral to Google's overall business strategy and continued growth.

Beyond legal victories, Alphabet's financial performance has been bolstered by its cloud-computing unit. In the second quarter, this segment delivered an impressive nearly 32% jump in revenue, exceeding market expectations. This growth underscores the successful payoff from strategic investments in in-house chips and the advanced Gemini AI model. Analysts note that while search remains a strong pillar, Alphabet's ventures into areas like YouTube and Waymo, alongside other emerging capabilities and products, are increasingly being recognized by investors, signalling a diversification beyond its traditional search-centric identity.

In terms of valuation, Alphabet currently trades at approximately 23 times its forward earnings. This represents the lowest multiple among the "Magnificent 7" stocks and is close to its five-year average of 22, according to data compiled by LSEG, suggesting a relatively attractive valuation despite its recent surge.