#Gate广场五月交易分享

Will the world's first market cap be overtaken? Google suddenly becomes the biggest winner of the AI era!

Over the past year, Alphabet (GOOGL.O) has completed an almost complete reversal of market perception. Previously, the market worried that AI chatbots would disrupt its core search business, but now, more and more investors are beginning to see Alphabet as one of the most comprehensive infrastructure winners in the AI era.

In last week's after-hours trading, Alphabet's market value briefly surpassed NVIDIA (NVDA.O). As of last week's close, Alphabet's market cap was about $4.8 trillion, while NVIDIA was about $5.2 trillion.

In the past six months, the gap between the two companies has rapidly narrowed. By the end of October last year, NVIDIA's market cap was close to $4.9 trillion, while Alphabet was less than $3.4 trillion; since then, Alphabet's stock price has risen 43%, while NVIDIA's increased only 6.3% during the same period. Over the past 12 months, Alphabet's stock price has increased approximately 160%.

The key to revaluing Alphabet lies in Wall Street gradually reaching a consensus: Google not only has model capabilities like Gemini and DeepMind but also controls distribution channels such as Google Cloud, TPU chips, search entry points, YouTube, and Android, covering almost all key links in the AI industry chain.

Gene Munster, managing partner at Deepwater Asset Management, said:

"Google is one of the two best-positioned companies in the AI field because they control most parts of the industry chain. Chips, models, infrastructure, and distribution channels—they have it all. Plus, their profitability is also very strong."

Anthropic deal ignites market enthusiasm

Market sentiment further heats up due to the news of a large-scale partnership between Anthropic and Google Cloud.

Last week, reports said that Anthropic committed to investing $200 billion in Google Cloud over the next five years to acquire about 5 gigawatts of computing power. After the announcement, Alphabet's market value briefly surpassed NVIDIA in after-hours trading.

Investors believe this once again proves that Alphabet has multiple ways to participate in AI competition and achieve profitability.

After Alphabet announced its earnings last week, JPMorgan (JPM.N) listed it as a "top pick" in the tech sector, saying the company's growth is accelerating. The earnings report showed that Google Cloud's backlog nearly doubled to $462 billion.

Citizens analyst Andrew Boone expects Alphabet to generate about $3 billion in revenue from TPU-related infrastructure in 2026, rising to $25 billion by 2027.

Google CEO Sundar Pichai also said that in the future, Google Cloud customers will be able to run Google TPU chips in their own data centers.

Wall Street begins to worry about customer concentration risk

However, some analysts remain cautious about the current hype. The biggest question is how much of the backlog in Google Cloud actually comes from Anthropic.

If the purported $200 billion Anthropic agreement is compared to the $462 billion disclosed cloud backlog, it suggests that Anthropic may account for more than 40% of future contracted revenue.

D.A. Davidson analyst Gil Luria believes this is very similar to Oracle's (ORCL.N) previous experience. Last year, Oracle's stock surged due to a spike in backlog orders, but later the market found that most of the growth actually came from OpenAI.

Luria said, "Their approach is very similar to Oracle's. They told us their backlog nearly doubled but didn't specify that almost all of the incremental growth came from a deal with Anthropic." Currently, he rates Alphabet as "Hold."

Luria also believes that large cloud service providers generally face customer concentration risks. Microsoft (MSFT.O), Oracle, Amazon (AMZN.O), and Google together have nearly $2 trillion in cloud backlog orders, with nearly half coming from OpenAI and Anthropic, which themselves are financed by cloud providers.

He said that when Google and Amazon promote strong demand for their chips, a significant part of that actually comes from invested companies, not genuine market demand.

TPU becomes Google's new core advantage

Compared to search, Wall Street is now more focused on Google's competitiveness in AI infrastructure.

Mizuho Securities estimates that by 2027, about $61 billion of Google Cloud's backlog may come from TPU sales, most of which could be recognized next year.

This also makes Google an important AI hardware bet outside of NVIDIA. This year, AMD (AMD.O), Intel (INTC.O), and Micron Technology (MU.O) have all seen their stock prices more than double, as the market searches for new beneficiaries of AI hardware.

Munster believes that even if Anthropic encounters problems in the future, other AI companies will fill the demand.

He said, "News about the size and risk of a single customer actually misses the point. If one customer fails, there will still be dozens of companies to fill its place in the long run."

In his view, this huge deal with Anthropic actually indicates that the AI industry is still in a very early stage, and the demand for computing power is still growing exponentially.

Alphabet's biggest risk has become its valuation

Now, Alphabet's biggest risk is no longer AI lagging behind, but whether the market has already overextended its future growth expectations.

Currently, Alphabet's expected P/E ratio is about 28 times, significantly higher than the less than 21 times average over the past 10 years, and close to the high range since 2008.

According to Bloomberg data, analyst consensus for Alphabet's 2026 net profit has been upwardly revised by about 19% over the past month. But even so, the average target price for the next 12 months is about $422, only about 5% higher than the current stock price. Munster said:

"The biggest risk in holding Google is that the company may find it difficult to change investor expectations through new narratives."

This makes the upcoming Google I/O conference particularly critical. Investors want the company to further clarify Gemini's Agent strategy and demonstrate how to continuously monetize from a broader AI ecosystem.

Currently, Alphabet expects capital expenditures to reach as high as $190 billion this year, more than double that of 2025.

While Argus analysts believe that the risk of capital expenditure is worth noting, they still give a "Buy" rating, believing that compared to companies like OpenAI, Google's ability to bear such scale of investment is itself a competitive advantage.

Luke O’Neill, Chief Investment Officer at CooksonPeirce Wealth Management, said: "Alphabet occupies an important position in almost every corner of the AI ecosystem, and this comprehensive layout makes it likely to be the biggest winner in the AI era."

He believes that compared to NVIDIA, which is more dependent on the AI chip cycle, Alphabet's business is more diversified, so even if one area slows down, others can fill the gap.

Last year, Warren Buffett's Berkshire Hathaway (BRK.A) also bought shares of Alphabet. O’Neill quoted Buffett as saying, "Buying a great company at a reasonable price is far better than buying an average company at a great price."

He said, "Even if it’s no longer ridiculously cheap, the price is still reasonable. Undoubtedly, this is a great company."