Alphabet's first-quarter results signal a shift in AI leadership from hardware to applications, narrowing its market-cap gap with Nvidia to approximately $150 billion.

Alphabet's Google Cloud reported 63% sales growth in the first quarter, shifting focus from data center hardware build-out to AI applications and generative AI/LLM (large language model) integration.

Nvidia has maintained its position as America's largest public company with a market cap that topped $5 trillion last week, but its dominance is vulnerable because several of its top customers are developing their own AI chips for their data centers.

Alphabet holds a virtual monopoly in internet search traffic through Google, premium ad pricing power with YouTube (the second-most-visited website), and operates Google Cloud (the world's No. 3 cloud infrastructure service platform), making it a more diversified AI player than Nvidia, whose data center revenue accounted for more than 91% of fiscal fourth-quarter sales.