Alphabet closes in on Nvidia as world's most valuable company, driven by cloud growth and AI chip sales

Alphabet's market cap stood at $4.67 trillion as of Tuesday morning, approaching Nvidia's $4.79 trillion. Alphabet's shares have surged about 24% this year, while Nvidia's shares are up just about 7%. This would mark Alphabet's return to the No. 1 spot for the first time in more than a decade, last held briefly in February 2016.

Google Cloud segment revenue grew 63% in the first quarter, the highest growth rate since the company began breaking out the segment's revenue in 2020. CEO Sundar Pichai said Google had started selling its AI chips, which compete with Nvidia's semiconductors, directly to some customers.

Alphabet is positioned as both a major AI services provider through its cloud platform and a key rival to Nvidia through custom processors that have won customers such as Anthropic. Wall Street analysts attribute the shift to hyperscaler capex spend and early signs of better monetization from Alphabet versus the broader AI supply chain.