Nvidia has become a focal point in the artificial intelligence (AI) market, establishing its dominance as a leading AI chip designer and creating a robust ecosystem of AI products. This success has resulted in a staggering 1,300% increase in its stock price over the last five years. Continuing this upward trend, Nvidia reported record revenues in 2025, supported by a surge in demand for its products, and saw its stock price rise in double digits. However, an unexpected competitor is outpacing Nvidia in stock performance this year.
Alphabet, the parent company of Google, is projected to experience a gain of over 65% this year, significantly surpassing Nvidia’s forecasted 40% increase. Alphabet’s momentum has been bolstered by its strong overall earnings, a prominent position in AI, and a favorable outcome in a recent antitrust lawsuit.
The company’s core business, Google Search, remains a dominant force, capturing over 90% of the global search engine market. This stronghold has consistently translated into substantial revenue, as advertisers flock to Google’s platform to reach their audience. Additionally, Alphabet’s Google Cloud division has emerged as a vital revenue stream, offering various cloud services and AI tools that have seen significant growth. In the latest reporting period, Google Cloud’s revenue rose by 34%, driven by heightened demand for AI services and infrastructure.
Furthermore, Alphabet has developed its large language model, Gemini, which enhances its internal operations and improves advertising performance for clients. As a result, the company achieved its first-ever $100 billion quarter, underscoring its solid growth trajectory as the AI market continues to expand rapidly.
On the legal front, a recent ruling in an antitrust case proved favorable for Alphabet. A federal judge dismissed the most severe potential consequences, such as the breakup of Google, ruling that the company would not be required to divest critical assets like Chrome or Android. This verdict has alleviated a significant risk for investors, boosting Alphabet’s stock price.
Heading into the next fiscal year, analysts question whether Alphabet can sustain its edge over Nvidia. Currently, Alphabet’s stock is trading at 29 times forward earnings estimates, which is notably lower than Nvidia’s valuation. This pricing could attract investors seeking reasonably priced AI stocks with considerable growth potential.
Investors may find comfort in Alphabet’s strong advertising revenue, which is expected to persist even amid fluctuations in AI spending. This stability could be appealing to those cautious about the pace of AI market advancement.
Overall, the optimistic outlook for Alphabet positions it as a formidable contender to continue its outperformance against Nvidia, reinforcing its reputation as a leader in the evolving AI landscape.
