Alphabet shares are holding firm amidst the Saas-pocalypse as investors think it will survive, but will it?

Alphabet shares may be down 3% in 2026, but compared to its other Big Tech peers, it is holding up relatively well. From Microsoft to Atlassian, from Salesforce to Adobe…software stocks have been sold off left right and centre as investors fear they’ll suffer the fate of Kodak and Blockbuster, unless they appease investor by laying off workers in the thousands.

But Alphabet has held up well, and for good reasons. Because it is right up there in the race with Anthropic and Open AI. And while there were times investors feared they would overtake them (most notoriously when Google searches actually fell last year), Google is anything but out of the race.

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An overview of Google

Google was founded in 1998 by Sergey Brin and Larry Page, but the parent company was only founded in 2015. The co-founders have stepped back from day to day operations, handing the reigns to Sundar Pinchai. It operates worldwide but has its headquarters in the Silicon Valley city of Mountain View.

There are 2 parts to the business. There’s the core Google business that hosts the search engine, Gmail, Google Maps, YouTube and Google Drive, among other features. Although the company divides the core business up between Services and Cloud, which one individual products fall isn’t that clear.

The company makes the majority of its revenue through advertising on its various platforms. But it is gradually diversifying its revenue streams through the sale of home products and subscription revenues such as YouTube Premium.

The key advantage Google has

In our view, its key advantage is the trust consumers have in it. Billions of time a day, people all over the globe turn to Google to know whatever it is they want or need to. Because they know they will get an answer without a whiff of judgement on who they are, where they are or what they are asking.

Whether you want to know the Prime Minister of some remote country, where to find the best pizza, what to do if you’re coughing so much, what [insert name of your ex here] is doing now…you get the drift. We ask things we wouldn’t ask our best friends, our parents, our doctor or faith leader.

Just look at your own recent Google search history. You will get honest answers – although some are paid, it is clearly noted which ones are organic and which ones are paid for. And either way, the answers are a benediction in themselves: ‘Go, take your newfound knowledge and live a better life’.

As for corporate clients, they have no choice but to go to Google if they want to reach people. As if they’d extract anywhere near the same results from Microsoft’s Bing.

2025 was a good year

The company delivered US$113.8bn revenue (up 18%) and a $34.45bn profit (up 30%). The company experienced growth across all segments of the business. Indeed, YouTube surpassed $60bn across ads and subscriptions and Google Cloud ended the year with an annual run rate of over $70bn. More than half its revenue came from search ($63bn) and over two thirds ($82bn) from advertising across all of its platforms. It guided to $175-185bn capex for 2026.

Key to Google’s Future: Gemini

Alphabet’s Gemini model is competing directly with OpenAI’s ChatGPT and Anthropic’s Claude. Gemini was first announced in mid-2023 and has been aimed at competing ever since. Ever since, Google has continually been refining it with Gemini 1.5, Gemini 2.5 and Gemini 3 in late 2025. These models have been increasingly integrated into Google search (“AI Mode”), cloud services, and consumer apps, and independent tests have suggested substantial gains in reasoning benchmarks and multimodal understanding.

How does Gemini compare? Well, it’s complicated from an individual user perspective. Gemini, is tightly woven into Google’s products and infrastructure, giving it advantages in real-time information access (via search), multimodal context, and scale across billions of users and devices (not just Search but YouTube and Android).

However, OpenAI’s GPT models remain extremely strong in broad reasoning, creative tasks, and developer ecosystem support, benefiting from a large existing user base and deep integrations in many tools. Anthropic’s Claude family leans into large context windows and safety-oriented design, appealing to enterprise deployments where cautious, explainable reasoning is valued. It appeals to enterprise customers and ethically minded developers.

But the narrative in where Google stands is not that it is just struggling to keep its head above water, but is neck and neck with the big players. Perhaps this explains why its shares have not declined by as much as its other peers.

Analysts’ mean target price is US$376.86 which is >20% above the current price. Consensus for 2026 calls for $470.3bn revenue and $11.51 EPS. For 2027, $540.6bn revenue and $13.30 EPS. Then for 2028, $615.4bn revenue and $13.50 EPS. These estimates put the company at 26.6x P/E and 1.7x PEG for 2026, then 22.9x P/E and 1.5 PEG for 2027.

Conclusion: There’s a good reason why Alphabet shares haven’t crashed amidst the Saas-pocolypse (at least not yet)

Google now sits as a major leader in the AI arms race, with Gemini anchoring a broad, commercially integrated strategy across Alphabet’s offerings. It stands alongside OpenAI and Anthropic — each with different models and philosophies — in driving the pace of innovation in generative and multimodal AI.

Of course, the question of “who is winning” is not static; advances continue rapidly, and leadership shifts depending on benchmarks, task categories, product adoption, and how deeply AI becomes embedded in real-world workflows across industries.

But right now, you cannot say Google is lagging its peers or that its investors fear that it is, in the same way one could make that argument for other tech stocks.