The Google parent company has become an AI superpower with a footprint that spans the entire industry.
Alphabet hasn't been worth more than Apple since 2019, but Wednesday's price action signals a changing of the guard.
Alphabet's stock rose more than 2% on Wednesday, pushing the Google parent company's market capitalization to $3.89 trillion, according to Dow Jones Market Data. That makes Alphabet more valuable than Apple, which is worth about $3.85 trillion on the heels of a fractional decline in its stock price.
Wednesday also marks the first time since Feb. 26, 2018, that Alphabet was the second-most valuable company in the U.S, according to Dow Jones Market Data. Nvidia is still by far the biggest U.S. company by market cap, worth more than $4.6 trillion.
Alphabet's stock has skyrocketed 66% over the last 12 months as Google cemented itself as a leader in the AI race and expanded its presence in virtually every facet of the ecosystem. The Mountain View, Calif.-based company dismantled fears that Google Search would be killed by OpenAI's ChatGPT and other large-language models.
Adoption of Gemini, Google's own LLM - which has surged with the release of the latest model - has become a signal of the company's strong position in the AI race. Nick Jones, an analyst at BNP Paribas Equity Research, said in a late Tuesday note that Google "may be positioned to be the dominant AI platform."
Some see Alphabet poised to eat into Nvidia's market dominance with its custom tensor processing units. In October, the company said it would provide Anthropic with up to 1 million of the chips, while Meta Platforms is reportedly considering using TPUs in its data centers. D.A. Davidson analyst Gil Luria estimates that Google's TPU and DeepMind businesses together could be worth nearly $1 trillion if spun out.
Alphabet also owns Waymo, the driverless-vehicle startup that currently leads the U.S. robotaxi market. Waymo is reportedly seeking to raise more than $15 billion at a valuation of up to $110 billion.
Meanwhile, Apple has struggled to convince investors of its AI positioning. The company has delayed AI features and is seen as being behind other Big Tech players when it comes to AI innovation.
