Alphabet is closing in on Nvidia in market valuation as investor optimism surrounding its artificial intelligence and cloud businesses continues to strengthen.
The surge has positioned Alphabet near the top of the world’s most valuable companies for the first time since 2016, when it briefly overtook Apple before losing the lead shortly afterward.
Much of the recent momentum has been driven by rapid expansion in Google Cloud and growing demand for AI-powered services. In the first quarter, Google Cloud revenue increased by 63%, surpassing analyst expectations and marking the division’s fastest growth since Alphabet began separately reporting cloud results in 2020, according to LSEG data.
Market analysts say investors are increasingly viewing Alphabet’s AI investments as commercially viable. Stephanie Link, chief investment strategist at Hightower Advisors, noted that investors are closely tracking AI spending trends among major cloud providers and watching for evidence that companies are successfully monetizing those investments.
Jeff Buchbinder, chief equity strategist at LPL Financial, added that strong demand for AI and cloud services has played a major role in accelerating Alphabet’s growth.
Alphabet is also expanding its AI hardware ambitions by developing custom AI chips designed to compete directly with Nvidia. Google CEO Sundar Pichai recently confirmed that the company has begun selling its AI chips to selected customers, including Anthropic.
As of Tuesday morning, Nvidia’s market capitalization stood at around $4.79 trillion, down from its peak valuation of nearly $5.2 trillion. Alphabet’s valuation, meanwhile, climbed to approximately $4.67 trillion, remaining close to record highs.
Alphabet shares have gained about 24% this year, while Nvidia shares are up roughly 7%. Nvidia also faced pressure after reports last month suggested that OpenAI missed user growth and revenue targets.
Alphabet’s current valuation now exceeds the combined market value of Germany’s and Switzerland’s primary stock exchanges. The company is trading at nearly 29 times forward 12-month earnings, above both its five-year average of 22 and the S&P 500 average of around 21.
By comparison, Nvidia trades at roughly 21 times forward earnings. Alphabet shares have surged more than 65% during 2025 as the company continues to expand its AI ecosystem and intensify competition with OpenAI.
Investor sentiment also improved after a US court ruling last year allowed Alphabet to retain ownership of the Chrome browser and Android operating system instead of forcing a breakup of the company.
