Over the past year, Alphabet Inc. From a latecomer in the field of artificial intelligence (AI) to a company that dominates the market in almost every technology aspect. Today, the company is expected to surpass AI chip giant Nvidia to become the world's largest company by market value.
“Alphabet occupies an important position in almost every area of the AI ecosystem, and all the services it provides combined make it very likely to be the biggest winner in AI,” said Luke O’Neill, chief investment officer at Cookson Peirce Wealth Management. The company holds stakes in Alphabet and Nvidia.
Alphabet, Google's parent company, closed on Friday with a market capitalization of $4.8 trillion. Nvidia's market value was below that level last Tuesday, but gains over the next three days pushed the market value to $5.2 trillion.
Over the past six months, as Alphabet's stock price has soared, rising 34% in April, its best monthly performance since 2004, the gap between the company and Nvidia has narrowed significantly. On October 31, Nvidia's market value was US$4.9 trillion, while Alphabet's market value was less than US$3.4 trillion. Since then, Alphabet's shares have soared 43%, while Nvidia's shares have risen only 6.3%, lagging far behind the S&P 500 and Nasdaq 100 indexes.
Investors say it's logical for Alphabet to eventually claim the title of the world's largest company by market capitalization because its reach extends to many important aspects of the technology industry and AI.
Nvidia may be the leader in AI chips, but one of Alphabet's products is gradually winning market favor. Alphabet also owns many large-scale businesses, such as 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 also an important investor in Anthropic, which owns the Claude model.
O’Neill said, “Nvidia is a great company, but if spending in the AI field slows down, its cyclical fluctuations may be greater. Alphabet’s business is very diversified, and even if one business has problems, other businesses can make up for the losses. Alphabet has a wider competitive moat and looks to be an iconic company in the Internet era. Therefore, it is reasonable for it to become the company with the largest market capitalization.”
Alphabet's market capitalization briefly surpassed Apple's in early 2016, becoming the stock with the highest market capitalization at the time. As of Friday, Apple's market capitalization was $4.3 trillion, followed by Microsoft at $3.1 trillion and Amazon at $2.9 trillion.