Alphabet closes in on Nvidia as AI bets lift shares

Alphabet, Google’s US-based parent, is close to overtaking Nvidia as the world’s most valuable listed company as investors back its AI push and faster cloud growth.

As of May 6, Alphabet was valued at about US$4.67 trillion, compared with Nvidia’s US$4.79 trillion. Alphabet shares have risen 24% this year, while Nvidia gained 7%.

LSEG data showed Google Cloud revenue rose 63% in the first quarter, its fastest pace since Alphabet began reporting the unit separately in 2020.

Google has started selling its AI chips directly to some customers, with CEO Sundar Pichai naming Anthropic among users of its custom processors.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Alphabet’s valuation draws from cloud growth and investment gains

Alphabet’s higher valuation tracks its AI push and quicker cloud growth, though a large share of recent profit came from a paper gain on its Anthropic stake. Anthropic is an AI startup and a Google Cloud customer 1.
In the first quarter, Alphabet posted US$62.6 billion in net income. That total included US$37.7 billion in unrealized gains from Anthropic, which lifted reported net income before any shares were sold 1.
Anthropic’s sales growth also supports demand across Alphabet’s AI business, including cloud services plus chips.

The AI chip market is turning into an ecosystem contest

Google sells custom chips through Google Cloud. That approach helps Alphabet win more of the AI infrastructure spending from customers such as Anthropic.
A 3.5-gigawatt commitment from Anthropic for next-generation Tensor Processing Unit (TPU)-based capacity starts in 2027. It ties Anthropic more closely to Google and Broadcom, a chip designer and supplier, which could raise switching costs 2.
This model combines chips with cloud services under one roof. Some analyses put Google’s performance per dollar as much as four times higher for certain AI tasks, which could lower costs for customers 3.