GOOGL Nears NVDA As World's Most Valuable Company: Analyst Sees Buyers Paying A 'Pretty Penny' For Its AI Compute

• Google reported blowout results on Wednesday, powered by its cloud unit’s performance.
• Google Cloud sales grew at a record 63% last quarter.
• Morningstar analysts said customers will continue to lap up additional compute and AI it brings to the market.

Alphabet’s market capitalization jumped by about $240 billion to $4.65 trillion, closing the gap with the most valuable company, Nvidia, after the search giant reported blowout results on Thursday, powered by its cloud unit.

On the other hand, Nvidia shares have been declining for three days, and its market capitalization has dropped from $5.26 trillion to $4.85 trillion.

Reporting alongside Amazon, Meta Platforms, and Microsoft, Alphabet’s results stood out. Revenue increased 22% to about $110 billion, and profit jumped 81% to $62.6 billion – beating Wall Street’s targets on both counts. 

Google Cloud sales increased 63% to $20.03 billion, handily beating expectations of $18.05 billion. Google search sales grew by a handsome 19% to $60.4 billion.

GOOGL shares gained 10% on Thursday, registering their best day in two years. The stock was up 0.5% in Friday’s premarket trading.

Google Compute, AI Chips In High Demand

“A year ago, Alphabet was trading as if it had lost the artificial intelligence race. What a difference a year, and clear evidence that the firm is generating strong returns from AI, can make,” Morningstar analysts said in an investor note.

Arguing that AI demand will continue to be higher than computing resources available for the foreseeable future, “any incremental compute that comes online, via TPUs or Gemini API, meets a buyer willing to pay a pretty penny to acquire it,” they said.

Google last year pulled ahead in the AI race with the November launch of Gemini 3, the most powerful version of its AI model and chatbot. It outperformed competing models on benchmark tests, scoring a range of intelligence categories.

Morningstar raised its price target on GOOGL to $433 from $340, implying a 13% upside from the stock’s last close. 

Retail View On GOOGL

On Stockwits, the retail sentiment held firmly in the ‘extremely bullish’ zone for a second day, amid ‘extremely high’ message volume.

“Monthly performance leaves me just spellbound. Any dips will be gobbled up. It would be the most valuable company soon,” said a trader.

Some, however, were skeptical that the current price trend might not hold. “$GOOGL Bullish on long term, but for today I would say it is a great chance to short. Buying climax and exhausted bull. Huge sell is coming for sure,” a trader wrote.

As of the last close, GOOGL shares are up 23% year to date.

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