Cramer: Google's Gemini could win AI race via Apple's 2.5B devices

Cramer's commentary reflects a shift in how he views Google's competitive position. Rather than praising the company for generating cash as investors did historically, he notes that Google is now spending heavily to remain in the AI race with the broader Magnificent Seven group. His core argument hinges on distribution moat (a durable competitive advantage): Gemini's pre-installed status on Apple devices, which number 2.5 billion globally, could be decisive if the AI market consolidates to a single winner. Cramer draws an explicit parallel to Google Search, implying that default placement on a massive, loyal user base has historically been Google's most formidable weapon. This framing suggests that in a commoditized AI market—where product differentiation between ChatGPT, Claude, Grok, Perplexity, and Gemini may be difficult to sustain—distribution and ecosystem integration, not R&D spending alone, may determine the winner.

Cramer also uses the commentary to redirect investor attention to other Google assets he views as undervalued. He specifically calls out YouTube as potentially the most profitable large-scale business ever invented, and Waymo (Google's autonomous vehicle unit), suggesting that the market's fixation on Google's AI expenditure has caused it to overlook durable, existing revenue streams. This broader portfolio argument reinforces his recommendation to hold large tech companies like Alphabet despite near-term AI spending pressures.