Google stock surged on Tuesday after Apple announced a landmark multi-year partnership to integrate Google’s Gemini AI models into Siri and other Apple Intelligence features.

The announcement lifted Alphabet into the exclusive $4 trillion market capitalization club for the first time.

Yet beneath the celebratory headlines, a growing chorus of Wall Street analysts is warning that much of the upside may already be priced into shares trading at historically elevated multiples.

Google stock: The Apple validation

Alphabet’s stock price climbed to an intraday high of $334 per share on Monday before settling near $336 on Tuesday, representing roughly a 2.5% daily gain.

The catalyst was explicit: Apple said it had evaluated AI models from Google, OpenAI, and Anthropic before concluding that “Google’s technology offers the most robust foundation for Apple Foundation Models.”​

The deal has substantial commercial implications.

Reports suggest Apple will pay Google approximately $1 billion annually for a custom 1.2 trillion-parameter Gemini model designed specifically to power Siri’s new capabilities.

For Alphabet, the partnership validates its heavy capital expenditure on AI infrastructure and provides tangible proof that Gemini models are competitive with, or superior to, OpenAI’s ChatGPT.​

“Gemini is the winner,” CNBC’s Jim Cramer declared, noting Apple’s “thorough evaluation” and selection of Google as the best option.​

Why are analysts cautious?

Yet the stock’s already-dramatic 66% gain in 2025 and near-record price-to-earnings multiple have prompted analysts to sound a more measured tone.

The consensus 12-month price target of approximately $325 to $345 implies only 0.5 to 4% additional upside from current levels.

Alphabet trades at a forward P/E of approximately 29-30 and a trailing P/E of 32-33, well above the 12-month average of 22.89.

More significantly, the Google stock PEG ratio of 1.81 suggests growth expectations may not justify the current multiple, as ratios above 1 typically signal overvaluation.

Analysts also note that Alphabet’s earnings growth is expected to slow to around 5% in fiscal 2026 before re-accelerating to 14% in 2027, a deceleration that could reignite volatility once investors fully price in the reality.​

Even bullish firms raising price targets: Bank of America lifted its target to $370 and Citizens JMP to $385, are acknowledging that current prices reflect most bull-case assumptions.​

Analysts also flagged regulatory headwinds.

Ongoing antitrust litigation in the United States could impose compliance costs or force divestitures that reduce core search profitability.

Additionally, energy constraints: AI data centers consume enormous amounts of electricity, which could pressurize margins if Alphabet must pay premium power costs to support its infrastructure-intensive business model.​

The Apple deal, while symbolically important, does not immediately generate outsized earnings accretion.

Monetization depends on the adoption of AI-powered Siri features launching later in 2026, with revenue timing uncertain and conversion rates unknown.​

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