CHICAGO – Over the past year, Alphabet has grown from an artificial intelligence corollary to a market-leading company with dominant positions in nearly every aspect of technology. Now I’m on the verge of overtaking AI chip giant Nvidia As the world’s largest company.
Luke O’Neill, chief investment officer at Cookson Perth Wealth Management, which owns shares in Alphabet and Nvidia, said: “Alphabet has important positions in almost every corner of the AI ecosystem, and by combining everything it has to offer, it is well positioned to be the biggest AI winner.”
Google’s parent company closed last week with a market capitalization of US$4.8 trillion (S$6.1 trillion), while Nvidia closed with a market capitalization of US$5.2 trillion.
The gap between the two has narrowed significantly over the past six months, with Alphabet stock having fallen sharply, rising 34% in April. As of October 31st, Nvidia’s market capitalization was US$4.9 trillion, while Alphabet’s market capitalization was less than US$3.4 trillion. Since then, Alphabet’s stock price has risen 43%, while Nvidia’s stock has only risen 6.3%, lagging behind the S&P 500 and the tech-heavy Nasdaq 100 index.
Investors argue that with its tentacles extending into so many important parts of the technology industry and AI trade, it stands to reason that Alphabet will eventually become the world’s largest company.
Nvidia may be the leader in AI chip development, but Alphabet has a rival product that’s gaining popularity. It also owns a number of large businesses, including Google Search, Google Cloud, YouTube, and Waymo. Additionally, Alphabet’s Gemini AI model is considered one of the best in the industry, and the company is also a significant investor in Anthropic, which has another major model in Claude.
“NVIDIA is a great company, but if spending on AI slows down, it could further worsen the economic cycle,” O’Neill said. “Alphabet is so diversified that if one business slumps, the others can pick it up. You don’t have as wide a competitive moat as Alphabet, and it’s like an Internet-era company. So it makes sense for Alphabet to be the biggest.”
This earnings season demonstrated that Alphabet is emerging as a standout winner among Big Tech. In addition to posting better-than-expected growth in its search and cloud businesses, the company’s tensor processing unit (TPU) AI chips have become a key attraction for customers. Google Cloud customers will soon be able to run it in their own data centers, CEO Sundar Pichai said.
Citizens analyst Andrew Boone said in a May 5 note to clients that Alphabet expects to generate approximately US$3 billion in revenue from TPU-related infrastructure in 2026 and US$25 billion in 2027.
Alphabet’s rise represents a stunning reversal. Less than a year ago, investors were dumping shares as the company’s core search engine business became a potential victim of AI disruption. Things started to change when Alphabet started incorporating AI into Google Search and Gemini became one of the most popular AI chatbots.
Analysts are now rapidly raising their earnings estimates. Over the past month, the consensus estimate for Alphabet’s 2026 net income has increased by about 19%, and its 2027 forecast has increased by more than 7%, according to data compiled by Bloomberg.
Of course, there is a risk that Gemini and other top AI models will be overtaken by rivals. Alphabet’s stock price struggles in 2025 demonstrate how quickly sentiment can change in the age of AI.
Alphabet stock trades at 28 times estimated P/E, which is hardly the nosebleed valuation of the dot-com era. However, this is well above the company’s 10-year average of less than 21 times, and near the company’s highest multiple since 2008.
Cookson Perth’s Mr O’Neill said: “It’s not unreasonable to think that this multiple could be maintained or even increased even if we were no longer able to acquire songs.” “I would not hesitate to purchase for a new account.”
To further illustrate this point, he quoted Warren Buffett, who said, “It’s far better to buy a great company at a fair price than a fair company at a great price.” In a tacit endorsement, Buffett’s Berkshire Hathaway bought Alphabet stock in 2025, an unusual high-tech investment for the famed value investor.
“This is a fair price, if not shockingly cheaper,” O’Neill said. “There is no doubt that this is a great company.”Bloomberg
