In a dramatic turn of events last week, Alphabet GOOGL briefly surpassed NVIDIA NVDA in after-hours trading, momentarily claiming the title of the world’s most valuable company, as cited in CNBC. This milestone follows a staggering 160% rally in GOOGL shares over the past year, signaling that investors are increasingly betting on Alphabet’s integrated AI strategy.
This neck-and-neck race for market supremacy puts a bright spotlight on exchange-traded funds (ETFs) with significant Alphabet exposure. For investors, these funds offer a strategic way to benefit from Alphabet’s momentum while maintaining a diversified portfolio, potentially driving increased demand for these investment vehicles.
Before identifying these ETFs for your portfolio, investors may want to understand what drove this surge and what could sustain Alphabet’s momentum in the years ahead. To answer these questions, we analyze the factors behind the latest rally and explore the company’s long-term growth drivers beyond AI alone.
Story Behind Alphabet’s Recent Ascension
Alphabet’s journey from the world’s second-largest company in November 2025 to briefly overtaking NVIDIA in May 2026 has been driven by several key catalysts. In particular, the turning point came after GOOGL announced blockbuster first-quarter 2026 results on April 30.
Alphabet’s revenues reached $110 billion, reflecting 22% growth, while its operating margin remained strong at 36.1%. The company also doubled its capital expenditures to $35.7 billion, signaling aggressive AI infrastructure investment without significantly hurting profitability.
Prior to this, in March, Alphabet completed its acquisition of Wiz, a premier cloud and AI security platform. This must have significantly bolstered investor confidence by integrating advanced, AI-driven threat detection across its cloud infrastructure. This buyout created a unified security powerhouse that enhances Google Cloud’s ability to protect complex multicloud environments, driving further enterprise adoption and opening high-margin revenue streams in the cybersecurity sector.
Earlier, a landmark antitrust ruling last September removed a major regulatory overhang, freeing Alphabet to go all-in on AI. Since then, its custom Tensor Processing Units (TPUs) have emerged as a viable alternative to NVIDIA chips, and a reported 200 billion cloud commitment from AI firm Anthropic added to a $462 billion cloud backlog. These factors, combined with Alphabet’s profitable core businesses — Search, YouTube and Waymo — likely helped the company briefly surpass NVIDIA in valuation last week.
Outlook: Can Alphabet Keep the Momentum?
Looking ahead, Alphabet’s presence across the entire AI stack — including chips, models, cloud and distribution — gives it a unique competitive advantage. Unlike NVIDIA, which remains primarily an AI infrastructure play, Alphabet can translate its AI investments directly into business outcomes by improving advertising, search and cloud margins. Beyond AI, additional growth drivers such as Waymo’s self-driving expansion and YouTube’s advertising resilience should help support the stock’s rally over the next few years.
ETFs to Buy
Considering the aforementioned discussion, Alphabet is on a powerful upward trajectory. However, the stock is currently trading at a premium valuation following its 160% rally, with its forward price/earnings (P/E) currently at 28, which is higher than that of NVDA’s P/E of 24. Therefore, investing directly in GOOGL right now may cost an investor. Also, Anthropic-related revenue concentration poses a risk.
Against this backdrop, investing in an ETF that holds Alphabet alongside other industry leaders can provide exposure to the same upside potential while reducing the risk associated with a single-stock pullback, such as one caused by an AI slowdown or regulatory action. This approach allows investors to benefit from broader industry growth without having to rely on just one winner.
Here are four ETFs that you may add to your portfolio:
Invesco NASDAQ Internet ETF PNQI
This fund, with a market value worth $564.7 million, offers exposure to 78 companies engaged in Internet-related businesses that are listed on the New York Stock Exchange (“NYSE”). Alphabet holds the second position in the ETF, with 9.84% weightage.
PNQI has gained 1.3% over the past year. The fund charges 60 basis points (bps) as fees. It holds a Zacks ETF Rank #2 (Buy).
Motley Fool 100 Index ETF TMFC
This fund, with asset under management worth $2.07 billion, offers exposure to 101 largest and most liquid U.S. companies that are either active stock recommendations in one of The Motley Fool, LLC research service or rank among the 150 highest-rated U.S. companies in the Motley Fool, LLC, analyst opinion database, Fool Intent. Alphabet holds the second position in the ETF, with 9.30% weightage.
TMFC has soared 28.8% over the past year. The fund charges 50 bps as fees. It holds a Zacks ETF Rank #2.
iShares U.S. Technology ETF IYW
This fund, with net assets worth $23.66 billion, offers exposure to 139 U.S. electronics, computer software and hardware, and information technology companies. Alphabet holds the third position in the ETF, with 7.46% weightage.
IYW has surged 53.7% over the past year. The fund charges 38 bps as fees. It sports a Zacks ETF Rank #1 (Strong Buy).
Vanguard Mega Cap Growth Index Fund ETF MGK
This fund, with net assets worth $31.9 billion, offers exposure to the 59 largest growth stocks in the U.S. market. Alphabet holds the fourth position in the ETF, with 5.50% weightage.
MGK has surged 30.7% over the past year. The fund charges 5 bps as fees. It carries a Zacks ETF Rank #2.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
iShares U.S. Technology ETF (IYW): ETF Research Reports
Vanguard Mega Cap Growth Index Fund ETF Shares (MGK): ETF Research Reports
Motley Fool 100 Index ETF (TMFC): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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