Alphabet Shares Face a Crossroads After Record Rally

As Alphabet's stock price hovers near its all-time high at the start of 2026, a clear divergence in sentiment has emerged among major market players. The upcoming quarterly earnings report will be a crucial test of whether the company's ambitious valuation, largely driven by its artificial intelligence narrative, remains justified.

Recent regulatory filings reveal a stark contrast in strategy among professional investors. Wallington Asset Management and Petros Family Wealth significantly increased their holdings in the tech giant last quarter, boosting their positions by approximately 30%. This move represents a strong vote of confidence. Conversely, Prentiss Smith & Co. reduced its stake by just over 11%, capitalizing on the elevated share price.

This institutional rotation coincides with notable insider activity. Chief Legal Officer John Kent Walker disposed of a block of shares shortly before the year's end. Given the stock's impressive advance of more than 70% over the preceding twelve months, this transaction is widely viewed as a routine profit-taking exercise.

Operational Strength Meets Lofty Expectations

These strategic shifts occur against a backdrop of robust fundamental performance. In Q3 2025, Alphabet delivered earnings per share of $2.87, comfortably surpassing analyst forecasts. This outperformance was fueled by a remarkable 34% revenue surge within its cloud computing division.

Should investors sell immediately? Or is it worth buying Alphabet?

However, with the share price currently at $315.15—matching its precise 52-week high—market expectations have soared. Investors are now keenly awaiting the Q4 results, due in late January, for confirmation that the company's heavy investments in AI infrastructure are sustainably supporting profit margins.

Waymo Emerges as a Key Growth Catalyst

Beyond the immediate financials, analysts are increasingly focusing on subsidiary Waymo as a primary future growth engine. The launch of its autonomous ride-hailing service in New York City in late 2025 and the subsequent expansion of its fleet to over 10,000 vehicles have solidified this view. Market experts, including those at Goldman Sachs, identify this division as a major catalyst. They project the stock could see further upside potential of 15% to 20% throughout 2026.

Technical Levels to Watch

From a chart perspective, the immediate focus is on key price levels. Maintaining support above the $310 mark is considered critical for the near-term bullish case. A decisive breakout above the $322 resistance level would be required to confirm the resumption of the longer-term upward trend, setting the stage for the next leg higher.