Alphabet shares hit all-time high on Gemini 3's rave reviews
What's the story
Alphabet Inc., Google's parent company, saw its shares jump by as much as 6.9% on Wednesday, the biggest spike since early September. The surge was fueled by positive reviews of the new version of Google's Gemini artificial intelligence (AI) model. The stock hit a new record high during the trading session with over 376,000 call options changing hands by 11:00am in New York City.
Market impact
Gemini AI model's launch and market response
The latest Gemini 3 AI model was launched by Google on Tuesday. The release has been widely praised for its capabilities, contrasting with the mixed reviews received by OpenAI's GPT-5 model earlier this year. Robert W. Baird & Co.'s analyst Colin Sebastian even questioned if "Gemini 3 is what GPT-5 was supposed to be?" in a note to clients, highlighting the positive reception of Google's new offering.
Investor confidence
Alphabet's stock upgrade and Berkshire Hathaway's investment
Loop Capital recently upgraded Alphabet's stock to 'buy,' citing that concerns about the stock had been "obliterated under waves of AI enthusiasm." The tech giant also received an unusual endorsement from Warren Buffett's Berkshire Hathaway Inc., which disclosed a massive $4.3 billion stake in Alphabet during Q3. This move by the legendary investor, who is usually not heavily invested in tech stocks (other than Apple), further boosted investor confidence in Alphabet.
AI advancements
Gemini 3's features and future rollout
Gemini 3 is "natively multimodal," meaning it can process text, images, and audio all at once. This represents an advancement in handling multiple types of data simultaneously. According to Google, it is the "best model in the world for multimodal understanding and our most powerful agentic and vibe coding model yet, delivering richer visualizations and deeper interactivity — all built on a foundation of state-of-the-art reasoning."
Security measures
Gemini 3's safeguards against misuse
Google executives are confident that they have built in safeguards to prevent Gemini 3 from hallucinating or being used for malicious purposes like hacking. The model is designed to provide "smart, concise and direct" responses, avoiding cliches and flattery for insight instead. This makes it a true thought partner, according to Google's DeepMind division CEO Demis Hassabis.
Investor scrutiny
Gemini 3's role in AI spending scrutiny
Along with offering more AI tools to consumers, Gemini 3 will also be closely watched as a metric for investors to gage the return on their massive investments in this technology. Alphabet has increased its capital expenditure budget from $91 billion to $93 billion, most of which is allocated for AI. Other tech giants like Microsoft, Amazon, and Meta Platforms are also spending heavily on their AI projects this year.