Shares in the Google-owner had lagged behind other megacaps this year amid fears it was losing ground in the race to deploy AI products. Yet since it unveiled its latest AI tools at a developer’s conference last week, the stock has advanced 12%, adding $160 billion in market value and erasing its underperformance against peers like Apple Inc. and Microsoft Corp.

“Investors are questioning whether Alphabet is a winner or loser as AI changes the landscape,” said Jason Benowitz, senior portfolio manager at CI Roosevelt. “This puts them more solidly in the winner camp.”

Alphabet continued its outperformance on Tuesday, rising 3.3% after 13F filings showed that Bill Ackman’s Pershing Square was among firms that bought the stock in the first quarter. Late on Monday, the hedge fund disclosed the purchase of more than 10 million of Alphabet’s Class A and Class C shares in the first quarter, worth about $1.2 billion at current prices.

With excitement around AI building, Alphabet had largely missed out on the stellar gains seen by many of its tech peers, particularly as the rapid growth of OpenAI’s ChatGPT is seen as a potential threat to the dominance of its search business. So last week’s announcement of a more conversational search engine and that the company is making its AI-powered chatbot more broadly available provided a timely boost.

Morgan Stanley analyst Brian Nowak was among Wall Street analysts heartened by Google’s presentation after what he called “AI overhang” in the stock.

If the company can successfully integrate the new AI features to its products that serve hundreds of millions of people, it should “build further confidence in AI driven upside to come,” Nowak wrote in a research note after the event.

Even after such a strong rally, Alphabet isn’t expensive relative to peers. At around 19 times, the stock’s price-to-projected profit ratio is the highest in months, yet it’s still much cheaper than Microsoft and Apple, which are priced at 29 and 27 times, respectively.

Of course, there are still plenty of skeptics. Loop Capital analyst Rob Sanderson says lingering concerns about AI risks will prevent Alphabet’s cheaper market valuation multiple from expanding. The analyst cut his rating on the stock to hold from buy on Monday, even though he sees the company as a major beneficiary of AI adoption in the long run.

“We do not see this as an existential threat to Google, but this behavior will become a competitive force against its dominance in connecting users to information,” he wrote.

Alphabet’s surge in the last week has propelled its relative strength index beyond the level of 70 that signals to some technical analysts that a stock may have risen too far, too quickly. The shares were trading higher 0.4% on Tuesday, still remaining in overbought territory.