Is Alphabet overtaking Nvidia? The AI chip king's reign is under threat

Alphabet is narrowing the gap with Nvidia in the race to become the world’s most valuable company. As of Tuesday, Nvidia’s market capitalisation stood at about $4.79 trillion, down from earlier peaks near $5.2 trillion, while Alphabet’s valuation has climbed to roughly $4.67 trillion. The gap between the two companies is under $200 billion.

Behind the rise

The gap has narrowed after Alphabet delivered strong first-quarter 2026 earnings, riding largely on rapid growth in its cloud computing and AI businesses.


Google Cloud revenue rose 63% year on year in Q1, crossing $20 billion for the first time. Overall revenue grew about 22% to $109.9 billion.

Cloud computing businesses provide remote computing power, storage and AI infrastructure to companies over the internet. As demand for AI tools rises, technology companies are spending heavily on cloud platforms to train and run AI models.

Competing with Nvidia

At the same time, Alphabet is moving deeper into Nvidia’s core market by developing and supplying its own AI processors, known as tensor processing units (TPUs). These chips are designed to handle AI workloads inside Google’s cloud infrastructure.

Anthropic has already committed significant long-term spending on Google Cloud and uses Google’s AI infrastructure and chips to train and run AI models.

Markets performance

According to US markets data, Alphabet shares rose on Tuesday while Nvidia shares declined. Alphabet’s Class C shares closed at $384.31, up 1.23% during regular trading, before climbing further to $390.79 in after-hours trading. Nvidia shares ended the session lower by about 1%.

Source: Google Finance

Valuation metrics also show the changing market view. Alphabet is currently trading at around 29 times forward earnings, above its five-year average of 22 and higher than Nvidia’s roughly 21 times.

Forward earnings multiples measure how much investors are willing to pay today for a company’s expected future profits. Higher multiples often indicate stronger expectations of future growth.

Bottom line

At the same time, Alphabet is significantly increasing spending on AI infrastructure. The company said it anticipates capital expenditure to touch $180-190 billion in 2026.

Nvidia remains the leading AI chip company, but Reuters reported that investors are watching whether its profits can keep growing against the backdrop of large Big Tech AI spending and rising competition from hyperscalers developing their own chips.

Also Read: Inside Big Tech’s March quarter earnings: Here’s all you need to know