Nvidia ( NVDA ) is currently valued at over $4.5 trillion, making it the world’s most valuable company on June 18, 2024, when its market capitalization exceeded $3.3 trillion. It later hit $4 trillion in 2025 and briefly hit $5 trillion last October. However, the stock has traded mostly sideways since last August around the current price of $189.
The reasons include investor concerns about increasing competition in artificial intelligence accelerators from players such as Advanced Micro Devices (AMD), geopolitical constraints such as restrictions on US exports to China, delays in the production of next-generation chips such as Blackwell, slowing revenue growth and valuation fatigue after years of rapid gains.
Traders at prediction market Polymarket believe there is a good chance Nvidia will be dethroned as the largest company by the end of the year, and Alphabet ( GOOG ) ( GOOGL ) will likely be the new king.
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Google’s parent Alphabet is headquartered in Mountain View, California, and operates a vast ecosystem including Google Search, YouTube, Android, Google Cloud, ad networks and hardware like Pixel devices. In recent years, Alphabet has made significant advances in artificial intelligence, launching Gemini 3 in 2025 as its most advanced model yet, requiring fewer requests and offering smarter responses.
Other advancements include the Ironwood AI chip (seventh generation TPU) for scaling large models, Gemma 3 for efficient open-source AI, SIMA 2 for AI agents in 3D worlds, and integrations like AI Mode in Search and Gemini Robotics for physical interactions. These innovations support their cloud and advertising businesses amid the AI boom.
Alphabet shares are up 1% year-to-date (YTD), only slightly underperforming the S&P 500 ($SPX)’s 1.89% YTD gain, but over the past year, GOOGL is up 69%, far outpacing the index’s 15% return. Valuation figures show a trailing P/E of 30.65, a forward P/E of 29.64 and a price/sales of 9.93. Compared to its 10-year historical average P/E of 27.69, it currently trades 7% higher, suggesting a premium. Compared to peers (average P/E 31.5x), it is attractive but expensive compared to the interactive media industry average of 12x.
The P/E indicates investors are paying $29.89 per dollar of earnings, reflecting growth expectations; Forward P/E anticipates earnings growth, while P/S values earnings at $9.81 per dollar, above historical norms due to AI-driven expansion. Overall, GOOGL looks fairly valued, balancing upside potential with a slight overvaluation relative to history.
On Polymarket, punters currently give Nvidia a 45% chance of being the largest company by market cap at the end of December 2026, beating Alphabet at 29%, Apple ( AAPL ) at 16% and others close behind. However, since early February, GOOGL has topped out at numerous points with recent volatility, including falling Nvidia shares and Alphabet’s brief drop on investment concerns, now leaving them within 5% of each other. This tight race reflects the shift in sentiment toward Alphabet’s AI dominance.
Several factors are fueling expectations that Alphabet — currently valued at $3.9 trillion — will overtake Nvidia. Its diversified revenue streams – beyond chips – include search advertising (still dominant), YouTube and Google Cloud, which grew 34% year-on-year (YoY) to $15.1 billion in Q3, accelerating due to AI demand. Unlike Nvidia’s hardware focus – vulnerable to supply chain issues and competition – Alphabet is integrating AI into all products, with breakthroughs like the Gemini 3 outpacing rivals and challenging OpenAI’s ‘code red’.
Google Cloud’s AI infrastructure, powered by Ironwood TPUs, attracts customers who scale large models, while AI improvements in Search (such as AI Mode with 75 million daily users) increase engagement and advertising effectiveness. Alphabet’s 2026 capex estimates of $175 billion to $185 billion support this, with 60% in servers for AI.
The market’s optimism stems from Alphabet’s moat: vast data for training, regulatory advantages in search, and AI-powered ads. Analysts see sustained revenue growth of 15% to 20%, potentially pushing its market cap past Nvidia’s if the AI hype cools for the chips. Alphabet’s agent AI also positions it as an “AI engine” for broader applications, making it a safer bet for long-term supremacy.
bar chartHis internal data shows an overall consensus opinion of “Strong Buy” for GOOGL shares, based on the opinion of 55 analysts. It breaks down as follows: 46 rate GOOGL a “Strong Buy,” three a “Moderate Buy,” and six say “Hold.” There are no “Sell” ratings. The strong buy signal aligns with broader market sentiment, reflecting the pace of Alphabet’s Q4 earnings and cloud growth.
The average price target of $368.58 implies upside potential of 16% from the current price of around $318, reflecting optimism for continued AI-led expansion, though downside risks include regulatory pressures.
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At the time of publication, Rich Duprey did not own (either directly or indirectly) any position in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
