Alphabet, the parent company of Google, is nearing a significant milestone as its market capitalization approaches $5 trillion, positioning it to potentially overtake Nvidia as the world's most valuable company [1]. This development follows a notable 10% surge in Alphabet's shares on Thursday, bringing its one-year gain to 140% and pushing its market cap above $4.6 trillion [1]. The rally was fueled by Alphabet's recent earnings report, which exceeded analyst expectations, including Google Cloud revenue surpassing $20 billion [1].
In contrast, Nvidia, currently the world's largest company with a market cap under $4.9 trillion, has seen its shares decline by more than 6% over two days. This drop followed a Wall Street Journal report indicating that Nvidia's business partner, OpenAI, missed internal revenue and growth estimates [1].
Options market data suggests that if Nvidia's stock does not recover before or after its upcoming earnings report on May 20, Alphabet could become the world's most valuable company as early as May 15 [1]. For Alphabet to match Nvidia's current market cap, its stock would need to rise another 4% to approximately $401 per share. Options traders are assigning about a 53% probability that Alphabet will reach this level between now and May 15, and a 30% chance it will close above $400 on May 22, the Friday after Nvidia's earnings report, according to ThinkOrSwim data [1].
The last time Alphabet held the title of the world's most valuable company was in 2016, when it briefly surpassed Apple [1].
CONCLUSION
Alphabet's strong earnings and share performance have positioned it to potentially overtake Nvidia as the world's most valuable company in the coming weeks. Options market data indicates a significant probability of this shift, highlighting the dynamic competition among tech giants and the market's responsiveness to earnings and partnership developments.