CHICAGO – Over the past year, Alphabet has gone from an artificial intelligence afterthought to the one firm in the market with dominant positions in nearly every aspect of the technology. Now it’s on the brink of overtaking AI chip giant Nvidia as the largest company in the world.
“Alphabet holds a significant spot in almost every corner of the AI ecosystem, and the combination of everything it offers puts it in a prime position to be the biggest winner of AI,” said Luke O’Neill, chief investment officer at CooksonPeirce Wealth Management, which owns stakes in Alphabet and Nvidia.
Google’s parent closed last week with a market capitalisation of US$4.8 trillion (S$6.1 trillion), while Nvidia ended at US$5.2 trillion.
The gap between the two has narrowed considerably over the past six months, as Alphabet shares have been on a tear, including a 34 per cent gain in April. On Oct. 31, Nvidia’s market capitalisation was US$4.9 trillion and Alphabet’s was less than US$3.4 trillion. Since then, Alphabet’s stock price has soared 43 per cent while Nvidia’s is up just 6.3 per cent, trailing the S&P 500 Index and the tech-heavy Nasdaq 100 Index.
Investors say it’s logical that Alphabet would ultimately seize the title of world’s largest company because its tentacles reach into so many important parts of the technology industry and the AI trade.
Nvidia may be the leader in building AI chips, but Alphabet has a rival product that’s gaining favour. It also owns a bunch of massive businesses like Google Search, Google Cloud, YouTube and Waymo. In addition, Alphabet’s Gemini AI model is considered one of the best in the industry, and the company is a significant investor in Anthropic, which has another leading model in Claude.
“Nvidia is a great company, but it has the potential to be far more cyclical should AI spending slow down,” Mr O’Neill said. “Alphabet is so diversified that if one business falters, the others can pick up the slack. You can’t get a wider competitive moat than Alphabet has, and it seems like THE company of the internet era. So it would make sense if it were the biggest.”
This earnings season offered a demonstration of how Alphabet is emerging as the standout winner among Big Tech. Not only did it post stronger-than-expected growth in its search and cloud businesses, but the company’s tensor processing unit, or TPU, AI chips have become a key attraction for customers. They’ll soon be available for Google Cloud clients to run in their own data centres, chief executive officer Sundar Pichai said.
Alphabet is expected to generate about US$3 billion of revenue from TPU-related infrastructure in 2026 and US$25 billion in 2027, Citizens analyst Andrew Boone wrote in a note to clients on May 5.
The ascent of Alphabet marks stunning a reversal. Less than a year ago, investors were dumping the stock as the company’s core search engine business was considered a potential victim of AI disruption. That started to change as Alphabet began incorporating AI into Google searches and Gemini became one of the most popular AI chatbots.
Now, analysts are rapidly increasing their earnings estimates. Over the past month, the consensus projection for Alphabet’s 2026 net income is up about 19 per cent, and 2027 expectations have risen more than 7 per cent, according to data compiled by Bloomberg.
Of course, there’s a risk that Gemini and other top AI models could get leapfrogged by rivals. Alphabet’s stock struggles in 2025 show how rapidly sentiment can shift in the AI era.
Alphabet shares trade at 28 times estimated earnings, which is hardly a dot-com-era nosebleed valuation. But it’s well above the stock’s 10-year average of less than 21, and right around the company’s highest multiple going back to 2008.
“Even if we’re not getting it for a song anymore, it isn’t unreasonable to think it can maintain or even grow this multiple,” CooksonPeirce’s Mr O’Neill said. “We wouldn’t hesitate to buy it for new accounts.”
To further that point, he referenced a quote from Warren Buffett, who said it’s “far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” In an implicit endorsement, Mr Buffett’s Berkshire Hathaway bought a stake in Alphabet in 2025, a rare tech investment for the famous value investor.
“Even if it isn’t screamingly cheap anymore, this is a fair price,” Mr O’Neill said. “It is unquestionably a wonderful company.” BLOOMBERG
