Nvidia (NVDA) is currently valued at over $4.5 trillion, having become 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 reached $5 trillion last October. Yet the stock has largely traded sideways since last August around its current price of $189.
Reasons include investor concerns over rising competition in AI accelerators from players like Advanced Micro Devices (AMD), geopolitical constraints such as U.S. export restrictions to China, production delays on next-generation chips like Blackwell, slowing revenue growth momentum, and valuation fatigue after years of rapid gains.
Traders on the prediction market Polymarket think there’s a good chance Nvidia will be deposed as the biggest company by the end of the year, and Alphabet (GOOG) (GOOGL) will likely be the new reigning king.
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Google parent Alphabet is headquartered in Mountain View, California, and operates a vast ecosystem including Google Search, YouTube, Android, Google Cloud, advertising networks, and hardware like Pixel devices. In recent years, Alphabet has made significant strides in AI, launching Gemini 3 in 2025 as its most advanced model yet, requiring less prompting and delivering smarter responses.
Other advances include the Ironwood AI chip (its seventh-generation TPU) for scaling large models, Gemma 3 for efficient open-source AI, SIMA 2 for AI agents in 3D worlds, and integrations like AI Mode in Search and Gemini Robotics for physical interactions. These innovations bolster its cloud and ad businesses amid the AI boom.
Alphabet’s stock is up 1% year-to-date (YTD), just slightly underperforming the S&P 500’s ($SPX) 1.89% YTD gain, but over the past year, GOOGL has surged 69%, far exceeding the index’s 15% return. Valuation metrics 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. Versus peers (average P/E 31.5x), it’s attractive but expensive relative to the interactive media industry average of 12x.
The P/E indicates investors pay $29.89 per dollar of earnings, reflecting growth expectations; forward P/E anticipates earnings rise, while P/S values revenue at $9.81 per dollar, above historical norms due to AI-driven expansion. Overall, GOOGL appears fairly valued, balancing growth potential against slight overvaluation relative to history.
On Polymarket, bettors currently give Nvidia a 45% chance of being the largest company by market cap at the end of December 2026, edging out Alphabet at 29%, with Apple (AAPL) at 16% and others trailing. However, since the beginning of February, GOOGL has shot to the top at numerous points, with recent volatility including Nvidia’s odds dipping and Alphabet’s brief drop due to capex concerns, now leaving them within 5% of each other. This close race reflects shifting sentiment toward Alphabet’s AI dominance.
Several factors fuel expectations that Alphabet—currently valued at $3.9 trillion—will surpass Nvidia. Its diversified revenue streams—beyond chips—include search ads (still dominant), YouTube, and Google Cloud, which grew 34% year-over-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 integrates AI across products, with breakthroughs like Gemini 3 outperforming rivals and prompting OpenAI’s “code red.”
Google Cloud’s AI infrastructure, powered by Ironwood TPUs, attracts customers scaling large models, while AI enhancements in Search (such as AI Mode with 75 million daily users) boost engagement and ad efficiency. Alphabet’s capex estimates for 2026 of $175 billion to $185 billion support this, with 60% in servers for AI.
Market optimism stems from Alphabet’s moat: vast data for training, regulatory advantages in search, and outgrowing ads through AI. Analysts see sustained 15% to 20% revenue growth, potentially pushing its market cap beyond Nvidia’s if AI hype cools for chips. Alphabet’s agentic AI also positions it as the “AI engine” for broader applications, making it a safer bet for long-term supremacy.
Barchart‘s internal data shows an overall consensus opinion of “Strong Buy” for GOOGL stock, 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 Alphabet’s Q4 earnings beat and cloud growth.
The mean price target of $368.58 implies 16% upside potential from its current price of about $318, reflecting optimism for continued AI-driven expansion, though downside risks include regulatory pressures.
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On the date of publication, Rich Duprey did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
