Alphabet, not Nvidia, should be world’s most valuable company says this analyst

Investing.com -- Alphabet (NASDAQ:GOOGL) deserves the crown as the world’s most valuable company, not Nvidia (NASDAQ:NVDA), according to brokerage MoffettNathanson, citing dissipating regulatory risks, accelerating AI momentum, and multiple growth drivers across its business.

The firm reiterated a Buy rating and raised its target price to $295, implying 19% upside from Tuesday’s close.

It contrasted Alphabet’s trajectory with peers, noting that while Nvidia’s massive +1227% earnings revisions have compressed its multiple, most other Magnificent 7 stocks have rallied on multiple expansion rather than earnings growth.

Alphabet, by comparison, has seen 34% upward revisions to 2025 EPS estimates, second only to Meta and Amazon.

“Alphabet emerges as one of the net winners in the AI race and remains the best-positioned company to monetize and scale GenAI opportunities,” said analyst Michael Nathanson in a note.

He highlighted four areas where AI will separate the tech giant from peers, including leadership in multimodal search, accelerating cloud growth, improving YouTube monetization, and the emergence of Waymo.

Nathanson said Alphabet’s major overhangs — the U.S. search antitrust case and concerns over ChatGPT — have largely lifted. Judge Amit Mehta’s recent ruling imposed far more lenient remedies than feared, while Google’s AI initiatives are narrowing the gap with OpenAI.

Early signals suggest GenAI-enabled chatbots are not cannibalizing traditional search, but instead expanding usage, leaving Google’s position intact.

Alphabet’s Gemini models are also gaining traction. The latest version, Gemini 2.5, tops crowdsourced benchmarking in several categories, and prediction markets give it a 66% chance of being crowned best AI by year-end, compared with 16% for ChatGPT.

Downloads of the Gemini app surged following the launch of new features, propelling it to the top of Apple’s App Store rankings.

Beyond search and AI, Nathanson sees Google Cloud as a clear beneficiary of the data center buildout. Growth is projected at 33% in 2025, outpacing Amazon’s AWS and Microsoft’s Azure.

“Nine of the world’s 10 leading AI labs use Google Cloud Platform (GCP), along with nearly all GenAI unicorns,” he noted.

YouTube, meanwhile, is viewed as on the cusp of a step-change in monetization, with new GenAI tools enabling brand sponsorships, commerce integration, and deeper engagement.

Waymo adds another long-term option, with expansion across multiple U.S. cities and a path to profitability later this decade.

Despite a recent rally, Nathanson stressed Alphabet still trades at a discount to historical relative multiples and remains cheaper than many peers.

Alphabet has mostly traded at the low end of its 10-year relative price-to-earnings (P/E) range since the launch of ChatGPT, and for the first time in over a decade, it sits below Meta’s multiple.

“This combination of market leadership, diversification, and scale positions Alphabet not only as a winner in the GenAI era but as a company that should rightly be considered for the title of most valuable company in the world,” he wrote.