Apple and Alphabet faced criticism for their AI performance, but are improving with Apple reporting record revenue in 2025 and hiring new AI leadership. Alphabet’s AI applications are driving growth, with increased search engine usage. The tech giants, once rivals, are now teaming up in the age of AI. Apple is set to license Alphabet’s Gemini AI model for Siri at a cost of $1 billion annually. Both companies have seen stock price increases in 2025.
Apple saw record revenue of $416.2 billion in its 2025 fiscal year, up from $391 billion the previous year, despite initial AI challenges. The company brought in new AI leadership with Amar Subramanya to enhance capabilities. Apple released the M5 chip in October to support AI on its devices. Sam Altman sees Apple as a major AI competitor.
Alphabet struggled in AI initially but made organizational changes to improve its approach. The company launched Gemini 3, their most advanced AI model yet, in November. This AI model can better understand user intent in Google searches. AI is driving growth for Google search, with revenue hitting $56.6 billion in Q3. AI also supports Waymo’s self-driving car business.
With the AI industry projected to grow significantly, investing in both Apple and Alphabet is ideal. Alphabet has an edge over Apple in terms of share price valuation. Alphabet’s earnings multiple has been lower than Apple’s, making it a better value. With the launch of Gemini 3, Alphabet could see further sales growth in 2026. Alphabet’s AI capabilities are expanding, with Waymo’s international operations set to grow.
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Read more at Nasdaq: Best Stock to Buy Right Now: Apple vs. Alphabet