Why Alphabet May Surpass Nvidia in the AI Race?

Nvidia is undoubtedly the biggest winner in the AI era, but some argue that Alphabet may ultimately come from behind.

Michael Nathanson, an analyst at research firm Moffett Nathanson, wrote in a recent report that Alphabet should be considered the most valuable company in the world, not Nvidia. His reasoning: Alphabet’s regulatory risks are dissipating, and its momentum in artificial intelligence is accelerating. Moreover, the company enjoys multiple growth drivers.

Nathanson set a price target of $295 for Alphabet, implying nearly 20% upside from Thursday’s closing price.

He emphasized that AI will enable Alphabet to stand out in four critical areas: strengthening its leadership in multimodal search, accelerating cloud computing growth, boosting YouTube monetization, and supporting the rise of autonomous driving through Waymo.

On the other hand, regulatory risks tied to the U.S. search antitrust investigation and concerns about ChatGPT’s lead have largely disappeared. At present, AI chatbots are unlikely to cannibalize traditional search; instead, they may broaden usage and reinforce Google’s dominant position.

He also noted that Alphabet’s Gemini model is gaining recognition. The latest version, Gemini 2.5, ranks among the top in multiple benchmark categories. Prediction markets estimate a 66% chance that Gemini will be named the best AI model by year-end, versus only 16% for ChatGPT.

Beyond search and AI, Nathanson expects Google Cloud to be a key beneficiary of data center expansion. This year, Google Cloud’s growth rate is projected to reach 33%, outpacing Amazon’s AWS and Microsoft’s Azure. Nine of the world’s top ten leading AI labs use Google Cloud, along with nearly all generative AI unicorns.

Meanwhile, YouTube’s new AI tools are enabling branded sponsorships, business integrations, and deeper engagement, further enhancing monetization. Waymo continues to expand its market presence, providing Alphabet with a long-term growth engine.

Nathanson concluded that Alphabet’s combination of market leadership, diversification, and scale not only makes it a winner in the generative AI era, but also positions it as the most valuable company globally.

Alphabet’s technology strength recognized: Meta looks to use Gemini for ads

According to The Information, Meta has been in talks with Google Cloud to explore the use of Gemini to improve its advertising business. Meta proposed fine-tuning Gemini and optimizing the open-source Gemma model using its ad data to improve targeting precision.

As one of the “Magnificent Seven,” Meta is seen as a leader in open-source large models. If Meta chooses to adopt Google’s model, it would further validate Google’s technological edge.

In addition, Google DeepMind updated its AI model series for robotics, launching Gemini Robotics 1.5 and Gemini Robotics-ER 1.5. These models work together as the “execution and decision system” for robots.

DeepMind explained that robots empowered by the new models can actively understand their surroundings and perform complex, multi-step tasks in a generalizable way.

In practice, robots first use the upgraded Gemini Robotics-ER 1.5 to perceive their environment and search information through Google, similar to humans.

The search results are then converted into natural language instructions, passed on to Gemini Robotics 1.5, which combines vision and language understanding to execute each step. Robotics is seen as the next trillion-dollar track in the AI value chain. Jensen Huang has already made large bets on it, and Google is also among the frontrunners.