Nvidia (NVDA) is currently valued at more than $4.5 trillion, and its market value exceeded $3.3 trillion on June 18, 2024, making it the world’s most valuable company. It then hit $4 trillion in 2025 and briefly hit $5 trillion last October. However, the stock has essentially traded sideways around its current price of $189 since last August.
Reasons include investor concerns about increased competition for artificial intelligence accelerators from companies such as AMD, geopolitical constraints such as U.S. export restrictions to China, production delays for next-generation chips such as Blackwell, slowing revenue growth momentum and valuation fatigue after years of rapid growth.
Traders at prediction market Polymarket believe that by the end of this year, Nvidia is likely to take over the position of the largest company, and Alphabet (GOOG) (GOOGL) is likely to become the new dominant king.
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Google parent company Alphabet, headquartered in Mountain View, California, operates a vast ecosystem that includes Google search, YouTube, Android, Google Cloud, ad networks and hardware such as Pixel devices. Alphabet has made significant progress in artificial intelligence in recent years, launching Gemini 3 in 2025 as its most advanced model yet, requiring fewer prompts and providing smarter responses.
Other advancements include the Ironwood AI chip (seventh generation TPU) for scaling large models, Gemma 3 for efficient open source AI, SIMA 2 for AI agents in 3D worlds, and integrations such as AI Mode in Search and Gemini Robotics for physical interaction. These innovations have bolstered its cloud and advertising businesses amid the artificial intelligence boom.
Alphabet shares are up 1% year to date, just shy of the S&P 500’s ($SPX) year-to-date gain of 1.89%, but GOOGL shares have soared 69% over the past year, far outpacing the index’s 15% return. Valuation indicators show that the trailing price-to-earnings ratio is 30.65, the forward price-to-earnings ratio is 29.64, and the price-to-sales ratio is 9.93. Compared to the 10-year historical average P/E ratio of 27.69, the current trading price is 7% higher, representing a premium. It’s attractive compared to peers (average P/E of 31.5 times), but expensive relative to the interactive media industry average P/E of 12 times.
The P/E ratio suggests investors are paying $29.89 per dollar of earnings, reflecting growth expectations; the forward P/E ratio projects earnings to rise, while the P/E ratio values revenue at $9.81 per dollar, which is above historical norms due to AI-driven expansion. Overall, GOOGL’s valuation appears to be quite reasonable, balancing growth potential with a slight overvaluation relative to history.
On Polymarket, bettors currently give Nvidia a 45% chance of becoming the largest company by market capitalization at the end of December 2026, beating out Alphabet at 29%, Apple (AAPL) at 16%, and others not far behind. However, GOOGL has surged to the top of the rankings at multiple points since early February, with recent moves including Nvidia’s declining odds and Alphabet’s brief dip on capex concerns, with them currently within 5% of each other. The close race reflects a shift in perceptions about Alphabet’s artificial intelligence dominance.
Several factors have fueled expectations that Alphabet (currently valued at $3.9 trillion) will surpass Nvidia. In addition to chips, its diversified revenue sources include search advertising (still dominant), YouTube and Google Cloud, which grew 34% year-on-year in the third quarter to $15.1 billion, accelerating due to demand for artificial intelligence. Unlike Nvidia’s hardware focus, which is vulnerable to supply chain issues and competition, Alphabet integrates AI across products, with breakthroughs like Gemini 3 leapfrogging competitors and pushing OpenAI into “Code Red.”
Google Cloud’s AI infrastructure powered by Ironwood TPUs engages customers in scaling large models, while AI enhancements in search, such as AI models with 75 million daily users, increase engagement and advertising efficiency. Alphabet expects capital expenditures in 2026 to be US$175 billion to US$185 billion, 60% of which will be spent on artificial intelligence servers.
The market’s optimism stems from Alphabet’s moats: vast amounts of data for training, regulatory advantages in search and scale beyond advertising through artificial intelligence. Analysts predict that if the artificial intelligence hype in the chip field cools down, revenue will continue to grow by 15% to 20%, and its market value may surpass Nvidia. Alphabet’s agent AI also positions it as an “AI engine” for broader applications, making it a safer bet for long-term supremacy.
Bar chartInternal data shows that the overall consensus on GOOGL stock is a “Strong Buy” based on 55 analysts’ opinions. The breakdown is as follows: 46 people have a “strong buy” rating on GOOGL, 3 have a “moderate buy” rating and 6 have a “hold” rating. There is no “sell” rating. The strong buy signal is consistent with broader market sentiment and reflects Alphabet’s fourth-quarter earnings turnaround and cloud computing growth.
The $368.58 average price target implies 16% upside potential from the current price of about $318, reflecting optimism for continued AI-driven expansion, although downside risks include regulatory pressure.
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On the date of publication, Rich Duprey did not hold (either directly or indirectly) any securities mentioned in this article. All information and data in this article are for reference only. This article was originally published on Barchart.com
