Alphabet briefly topped Nvidia in after-hours trading after a massive Google Cloud deal tied to Anthropic

Alphabet (GOOGL) briefly climbed above Nvidia (NVDA) in after-hours trading this week, giving Google a short stay at the very top of the stock market.

That is a serious turn for a company many investors were ready to punish when the AI boom first made chatbots look like a direct threat to search ads.

The stock has appreciated by around 160% in the past year, thanks to the belief that Google has multiple AI lanes running at the same time – their own algorithms, their large customer base, their cloud service, and even their own processors.

However, by the end of the trading day on Friday, Alphabet had slipped to number two. While Alphabet’s stock had a valuation of about $4.8 trillion, Nvidia’s was around $5.2 trillion.

Nevertheless, the temporary ascendancy is significant due to the rapid closing of the valuation gap. For instance, on October 31, Nvidia had a valuation of $4.9 trillion, whereas Alphabet’s was below $3.4 trillion.

Alphabet turns Google Cloud, Gemini and TPUs into a bigger AI trade

This time, the latest news catalyst was that Anthropic would be spending $200 billion on Google Cloud for 5 gigawatts of computing power.

As a result, more focus shifted to Google’s data center business and TPUs, the AI chips that Google offers its cloud users. Mizuho thinks that sales of the TPUs will add up to $61 billion to Google Cloud’s pipeline by 2027, with the majority being recorded in the coming year.

This becomes significant for those who want to play the artificial intelligence theme without relying solely on Nvidia. The hardware narrative has reached far and wide.

Stocks of Advanced Micro Devices (AMD), Intel (INTC), and Micron (MU) have gained more than 100% year-to-date while betting on stocks with chip, server, and memory exposure. As far as the 12-month return performance of other U.S.-listed tech companies valued at over $1 trillion, only Broadcom (AVGO), which is 107%, follows Alphabet.

Google’s shift towards artificial intelligence erased the concern surrounding the search engine. Just less than a year ago, there was widespread concern about AI answers leading consumers away from Google’s core business.

The tension was reduced after the corporation introduced AI technology in its searches and made Gemini one of the most used chatbots. This does not mean that it gets rid of the threat, but modifies it.

Furthermore, Alphabet is not unfamiliar with being on top since, in early 2016, it surpassed Apple (AAPL), which was the leading firm at that time. As of last Friday, the market capitalization of AAPL was around $4.3 trillion, while that of MSFT was $3.1 trillion, and AMZN was $2.9 trillion.

Google must show investors that heavy AI spending can pay back

The stock of Alphabet fetches a P/E ratio of approximately 28 times estimated earnings, above the historical mean of under 21 times and very close to its highest level since 2008.

Profit estimates have also been hiked by analysts. In the last month alone, the earnings forecast for Alphabet’s net income in 2026 went up by roughly 19%, with the 2027 forecast growing by more than 7%, according to Bloomberg data.

The next event risk for Google would be its I/O conference in less than two weeks, which is expected to offer information on Gemini, AI agents, and monetizing the increased use of AI into revenues. Moreover, the capex for this year could amount to $190 billion, twice the level in 2025, meaning that the company must make its numbers add up.

At the same time, Nvidia must prove its dominance. Analysts following LSEG anticipate 78% growth for Nvidia’s revenue during the earnings report this month, despite its stock having gained 15% year-to-date, slightly ahead of the Nasdaq.

As far as Alphabet goes, the median target price of analysts for the next 12 months stands at about $422, barely 5.4% above Friday’s close price. This provides limited upside potential given a 160% rally in the last year.