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Google (GOOG) now leads AI software after overtaking Microsoft. Google is less than $200B away from surpassing Apple as the world’s second-largest company.
Google holds four of the top 10 AI models on LLMArena. OpenAI’s best model ranks eighth.
Meta is negotiating billions in purchases of Google’s TPUs. Anthropic already bought 1 million TPUs from Google instead of buying from Nvidia (NVDA).
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The stock market is quickly waking up to the fact that Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the leading AI software company today. It has overtaken Microsoft (NASDAQ:MSFT) and is less than $200 billion away from overtaking Apple (NASDAQ:AAPL) as the world’s second-largest company. Overtaking the AI hardware leader, Nvidia (NASDAQ:NVDA) will take a bit more work, as it has a $755 billion lead over Google. Fortuitously for Google, that number is a drop in the bucket these days for Wall Street.
There are still some bears who believe that Google will lose out in the end due to AI “replacing” the search engine business, but a lot is going wrong with that argument. Even Nvidia may get competition from Google, as the company has begun breaking into the AI hardware industry and is landing deals.
Let’s take a look at whether or not all this momentum will translate into Alphabet becoming the biggest company in 2026.
Google was supposed to “die” after Microsoft integrated its Bing search engine with ChatGPT. The issue was that people never ended up ditching Google. ChatGPT was never a 1:1 replacement for what Google offered, and AI could never provide the same reliability that a direct search can.
Then, Alphaebt began to beat both OpenAI and Microsoft at their own game. Its initial AI “Bard” rollout was rushed and disappointing, but Google has made outstanding progress since. OpenAI is now in “code red” mode after the Gemini 3 Pro was released and promptly took over the leaderboards.
If you look at the top 10 AI models on LLMArena, four are from Google. No other company matches that. OpenAI’s sole top 10 model is eighth, with xAI and Anthropic having two models each.
If you move past text AI models, Google does even better. Its latest Nano Banana Pro image model puts OpenAI’s GPT image to shame. The company even leads when it comes to text-to-video models.
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Alphabet is doing all that while keeping costs under control. It hasn’t spent excessively on AI, and cash on the balance sheet increased from $19.96 billion in Q3 2024 to $23.09 billion in Q3 2025. AI rivals like Meta Platforms (NASDAQ:META) have gone into net debt.
If Google’s rivals somehow find their bearings and win the AI race, the core search engine business, the cloud business, and other businesses like YouTube will remain insulated.
As for search, consumers have shown no desire to stick with an alternative. This is mainly because Google owns the search bar and provides all they need. Going to another AI website, searching, and waiting for it to provide an answer is an extra level of inconvenience that very few people are willing to put up with.
In contrast, you can just use your search bar. Google itself will give you an AI answer, with all the regular results below it.
Software isn’t Alphabet’s only strong suit. Google has aggressively expanded into custom silicon with its TPUs and Axion CPUs. It could shatter Nvidia’s near-monopoly if the company can execute well, since the hardware is much cheaper and more energy-efficient.
Meta is in discussions with Google to buy TPUs worth “billions of dollars,” with AI company Anthropic already buying 1 million of them. This is money that would have otherwise gone into Nvidia’s coffers instead.
The threat Nvidia faces from Google is very underestimated today. However, this could just be a repeat of how Google’s AI was shrugged off, only to end up dominating.
I do believe Alphabet is set to become the world’s largest company, either in 2026 or sometime in this decade. EPS is expected to jump from an estimated $10.56 in 2025 to over $26 in 2031. Some analysts expect EPS to be over $30.7 by then. Revenue is also expected to keep growing at a very healthy clip and possibly double from 2025 to 2030.
Nvidia will be growing at an even faster clip, but all its eggs are in one basket. That basket is being threatened by Google.
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