Mag 7 Shakeout: Alphabet Poised to Overtake Nvidia as World’s Most Valuable Company

Shares of Google parent Alphabet are quietly approaching the $5 trillion mark and are on the verge of overtaking AI leader Nvidia as the world’s most valuable company.

A 140% Annual Surge

Following a 10% surge on Thursday, Alphabet’s 1-year gain now stands at a remarkable 140%, bringing its market capitalization to over $4.6 trillion. The company reported revenue on Wednesday that beat analyst estimates, with Google Cloud revenue surpassing the $20 billion mark.

Meanwhile, the world’s biggest company — AI kingpin Nvidia, now trading with a market cap under $4.9 trillion — is down more than 6% over two days following a Wall Street Journal report that business partner OpenAI missed internal revenue and growth estimates.

What the Options Market Says

The math is straightforward: Alphabet needs to rally another 4% or so, to roughly $401 per share, to achieve Nvidia’s current market cap.

Based on the premiums paid for call contracts around that strike, options traders are assigning about a 53% chance that Alphabet could touch that level at any point between now and May 15. The odds that it will close above $400 on May 22, the Friday after Nvidia’s earnings, are about 30%, according to ThinkOrSwim data.

Nvidia Earnings as a Pivot Point

If Nvidia doesn’t rally into or after its May 20 earnings report — and the stock has indeed fallen after four of its last five earnings releases — the options market suggests Alphabet is likely to become the world’s most valuable company as early as mid-May.

Historical Context

The last time Alphabet was the world’s most valuable company was in 2016, when it briefly nudged Apple from the top spot. If Alphabet overtakes Nvidia, it would mark the first major reshuffling of the tech giant power hierarchy since the AI investment boom began.

This potential cap crossover also reflects the market’s re-rating of Alphabet’s cloud business and AI integration capabilities, while Nvidia’s growth narrative faces questions following the OpenAI revenue report.

Source: CNBC