Google Nears $4 Trillion Market Cap as Nvidia Stocks Plunge

UPDATE: Google’s parent company, Alphabet, is on the verge of a historic milestone, nearing a $4 trillion market capitalization as of Tuesday morning. This surge comes amid a tech rally, positioning Alphabet as a rising star on Wall Street, even as Nvidia shares slump.

As of this morning, Alphabet’s stock price rose approximately 1.3%, bringing its market cap to about $3.9 trillion. This marks an astonishing 70% increase so far this year. In stark contrast, Nvidia’s stock has fallen over 5%, continuing its downward trend, fueled by speculation that Meta may pivot to using Google’s AI chips.

The past six weeks have been particularly transformative for Alphabet, with its stock price climbing nearly 35%, adding around $1 trillion in market value. If this trajectory continues, Alphabet could become only the second company in U.S. history to surpass the $4 trillion mark, just behind Nvidia, which briefly hit $5 trillion before its recent drop.

Investor confidence in Google has been bolstered by a surprising move from Warren Buffett’s Berkshire Hathaway. The investment firm has quietly amassed a multibillion-dollar stake in Alphabet, marking its first-ever investment in the tech giant. This endorsement signals a strong belief in Alphabet’s AI strategy, which many now view as legitimate and promising.

Alphabet is not just competing with Nvidia for market cap; it is increasingly recognized as a serious contender in the AI accelerator market. The company’s newly launched Gemini model, hailed as its most sophisticated AI system, has received notably positive feedback, reshaping perceptions of Alphabet’s capabilities in a fiercely competitive tech landscape.

Excitement is also mounting around potential developments with Meta. Reports suggest that Meta may be negotiating to acquire Google-designed AI chips, which could significantly alter the competitive dynamics in the AI sector. Given that Meta is one of the largest AI investors globally, any shift in its funding away from Nvidia to Google would have profound implications.

Currently, Alphabet’s market cap is about $300 billion less than Nvidia’s, a gap that seemed insurmountable just weeks ago. However, with Alphabet’s rapid ascent and Nvidia’s recent challenges, the tech world is now watching closely to see who will ultimately lead this high-stakes race.

For context, since going public in August 2004 at a mere $2.13 per share, Alphabet’s stock has skyrocketed, offering returns of approximately 15,000%. An investment of just $1 at the IPO would now be worth about $150.

As this story develops, investors and tech enthusiasts alike should keep a close eye on Alphabet’s movements, especially in light of its bold AI strategies and the potential disruptions in the market.