The market is re-evaluating Google AI: the increase surpasses NVIDIA, is a market value of 3 trillion just the starting point?

Investment Insight -

The competitive landscape among the "Big Seven" tech giants is quietly changing. So far this year, Alphabet (the parent company of Google) has outperformed NVIDIA with a 33% increase compared to NVIDIA's 32.3%, becoming the best-performing stock among the "Big Seven." This performance marks a significant return of market confidence in Google—it's worth noting that at the beginning of the year, the company's stock price had plunged 24.6% due to the impact of AI on its search business and antitrust pressures.

Behind this comeback, two key forces are driving the change.

First, the AI product Gemini recently topped the free charts in the U.S. iPhone App Store, and its newly launched image editing feature Nano Nano is seen by the market as likely to help Google capture more market share in generative AI;

Second, earlier this month, a federal judge made a favorable ruling allowing Google to retain control over the Chrome browser and Android system, significantly alleviating market concerns about antitrust pressures.

As a result, Google's stock price surged over 4% on Monday (September 15), with its market capitalization historically surpassing $3 trillion, making it the fourth U.S. company to enter the "trillion-dollar club" after NVIDIA, Microsoft, and Apple.

This performance has also attracted responses from major banks. Citigroup analyst Ronald Josey significantly raised Alphabet's target price from $225 to $280, one of the highest expectations in FactSet statistics. He pointed out that the improved regulatory environment and the accelerated iteration of the Gemini product are two core positives. Additionally, Google's vast product ecosystem—boasting 15 products with over 500 million monthly active users, seven of which exceed 2 billion—provides a unique advantage for its AI integration and distribution.

Although Gemini's current user adoption still lags behind ChatGPT, Josey emphasized that its features, performance, and pricing are becoming increasingly competitive, likely driving broader user adoption. Furthermore, Google's cloud business reported a remarkable 32% year-over-year revenue growth in the second quarter, with long-term investments in self-developed chips and AI models gradually paying off.

Looking back, the reshuffling of market capitalization among tech giants continues. Just last Friday, NVIDIA was still the top gainer among the "Big Seven" for the year, with Meta closely following. However, as NVIDIA faces ongoing regulatory scrutiny in China, even being accused of monopolistic practices by Chinese regulatory authorities recently, its stock price is under pressure.

Regardless, Google's comeback not only signifies its return to the ranks of popular AI stocks but also sends a clear message to the market: in the race for artificial intelligence, ecosystem integration and regulatory environment may be becoming as important as the technology itself.

Currently, the AI competition has entered deep waters, with giants no longer just competing on large model parameters and computing power, but also testing product deployment speed, ecosystem collaboration capabilities, and resilience in responding to global regulations. Google's rebound may just be the beginning