"No company in the technology industry has benefited from the rise of artificial intelligence (AI) as much as Nvidia . Over the last three years, shares of the semiconductor giant have soared by more than 970% -- propelling its market cap to $4.5 trillion and making it the most valuable company in the world. By contrast, Alphabet's price action was fairly muted throughout much of the AI revolution -- up until recently."
"When OpenAI released ChatGPT three years ago, many analysts on Wall Street almost immediately bought into the idea that the chatbot would make Google Search into a relic. For a while, this sentiment appeared realistic. Growth in Alphabet's advertising segment -- primarily stemming from Google and YouTube -- was failing to impress investors. Moreover, few were giving the company credit for its cloud computing business, which until the first quarter of 2023 was unprofitable."
"Fast-forward to 2025, and the narrative around Alphabet seems to have completely flipped. Advertising revenue is growing at a respectable double-digit percentage clip. Meanwhile, Google Cloud Platform (GCP) has proven a formidable peer to Microsoft Azure and Amazon Web Services ( AWS). Alphabet's own LLM, Gemini, has become a fixture on Google Search -- providing AI-powered summaries to queries that are similar to what users would get from ChatGPT. Moreover, Gemini has also been integrated into the company's Android consumer electronics devices."
Alphabet has shifted from investor concern to momentum by leveraging AI across its core businesses. Google Search now includes Gemini-powered AI summaries and Android devices use Gemini features. Advertising revenue has returned to double-digit growth while Google Cloud Platform has emerged as a competitive alternative to Azure and AWS. Earlier cloud unprofitability has been addressed since early 2023. Nvidia's market-cap surge to $4.5 trillion reflects AI hardware demand, but Alphabet's integrated AI products, services, and improving financials have driven a recent stock rally toward a $4 trillion valuation, raising the possibility of surpassing Nvidia.
Read at The Motley Fool
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