July 16, 2024

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Will Alphabet Be Worth More Than Nvidia by 2025?

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Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) stock has rallied by more than 40% over the past 12 months and is currently hovering near its all-time high. The tech giant impressed investors with the accelerating growth of its advertising and cloud businesses, a new $70 billion share buyback plan, and the approval of its first-ever dividend.

Those positive developments somewhat allayed investors concerns about Alphabet’s slower progress in the artificial intelligence (AI) market relative to its peers, but it is still overshadowed by Nvidia, which rallied by more than 210% over the past 12 months as the market’s demand for its AI accelerator chips outstripped its ability to supply them.

An analyst checks multiple trading screens in an office.

Image source: Getty Images.

Nvidia also surpassed Alphabet’s market cap for the first time this year. As of this writing, Nvidia is worth $3.3 trillion while Alphabet is worth $2.2 trillion. But could Alphabet accelerate and overtake Nvidia again by the end of 2025?

Has Alphabet overcome its near-term challenges?

Alphabet generates most of its revenue from Google’s advertising business, which includes its search and display ads, network ads, and YouTube. The rest of its revenue mainly comes from Google Cloud, the world’s third-largest cloud infrastructure platform, as well as Google’s subscription, platforms, and devices division.

Alphabet’s revenue only rose 10% in 2022 as concerns about the macroeconomic outlook led many companies to rein in their marketing and cloud spending. The company also faced stiff competition from Meta Platforms and ByteDance in the advertising market, and it seemed to struggle against Amazon and Microsoft in the cloud market. But over the past year, all three of Alphabet’s core businesses warmed up again.

Metric

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Google advertising revenue growth (YOY)

0%

3%

9%

11%

13%

Google subscriptions, platforms, and devices revenue growth (YOY)

9%

24%

21%

23%

18%

Google cloud revenue growth (YOY)

28%

28%

22%

26%

28%

Total revenue growth…



2024-06-22 18:45:00

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