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NVIDIA (NASDAQ: NVDA | NVDA Price Prediction) could lose its crown as the world’s most valuable company. Alphabet’s (NASDAQ: GOOG) market cap sits at over $4.8 trillion. NVIDIA’s is $5.2 trillion trillion. However, Nvidia’s market cap is up 16% this year. Alphabet’s is up 26%. And, Nvidia’s stock has jumped around recently, with a sell-off in early May. What has become clear is that Alphabet has multiple highly profitable businesses that help it immensely. NVIDIA is a one-legged stroll, as the near-term future of AI has started to be questioned.
Alphabet’s Gemini has started to challenge OpenAI in both personal and enterprise use. Anderson Horowitz puts Gemini downloads closer to ChatGPT. Each is well ahead of DeepSeek, Grok, and Claude. One reason is the Google distribution system.
Gemini has been built into Google Search and other products, including Gmail. There are 14 billion Google searches per day. About 1.8 billion people have active Gmail accounts.
Google’s search business is the world’s largest. Google’s search revenue last year was $82 billion. YouTube’s total was $11.3 billion (it is part of the Google total, but leads the world in video views)
“Alphabet holds a significant spot in almost every corner of the AI ecosystem, and the combination of everything it offers puts it in a prime position to be the biggest winner of AI,” Mr. Luke O’Neill recently said. He is the chief investment officer at CooksonPeirce Wealth Management, which owns stakes in Alphabet and Nvidia.
NVIDIA is the clear leader in the AI chip market. But, challengers have grown. First among these is AMD (NASDAQ: AMD). Alphabet, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Meta are trying to edge into the sector. Broadcom has recently been added to that list. How impressed are you with the market with AMD? AMD’s stock is up 112% this year. Broadcom’s is new to this list.
Is the Nvidia skepticism growing? According to 247WallSt, reports on a CNBC evaluation, “The skeptical panelist remains a ‘big believer’ in being in the ‘second inning of AI,’ but trimmed NVIDIA because ‘there is no opportunity for them to change the narrative.” The core friction: Hyperscaler CapEx is modeled by the Street to grow roughly 10%, while Jensen Huang is guiding to a 40% trajectory. That gap has to close somewhere.’
And, there is the issue of whether AI data center growth will continue at the pace the industry thought it would at the start of the year. Accessibility to electricity and water have become barriers. So, there has been pushback by local communities. NVIDIA’s growth could be slowed by this.
Finally, Nvidia is blocked from selling its most powerful chips to China, which is the world’s largest developer of AI products, behind the US.
