Nvidia became the world's first $5 trillion company at the end of October, on the back of strong momentum and optimism for continued growth in artificial intelligence (AI) spending. It's an impressive milestone to be sure, but the stock has since fallen back down 10% to trade firmly in the $4 trillion territory.
As we enter 2026, a handful of stocks are making the case that they're also worth $5 trillion, and Nvidia investors expect to return to that level once again. But one stock stands out as my favorite to reach $5 trillion before anyone else next year.
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A major threat to Nvidia's dominance
Nvidia has produced excellent earnings growth for investors on the back of soaring demand for its GPUs. But ultimately, Nvidia is something of a one-trick pony. If its customers slow down spending or diversify their spending with other chipmakers, there's no other source of revenue that can make up for those losses. That's exactly the fear that sent shares down 10% since reaching an all-time high at the start of November.
Alphabet (GOOG 1.34%) (GOOGL 1.38%) has emerged as a meaningful threat to Nvidia's dominance. Alphabet and Anthropic announced a deal for the large language model developer to use its Tensor Processing Units (TPUs) on Google Cloud starting in 2026. Not only will that bring in a meaningful amount of revenue for Alphabet's cloud computing business, but it also represents a serious threat to Nvidia, as a leading AI developer is opting to use Alphabet's custom silicon instead of the leading GPUs.
More recently, a report from The Information said Meta Platforms is also interested in using TPUs for its Llama models. Meta could either rent space on Google's platform or buy the TPUs directly. A Google Cloud executive said Alphabet could generate 10% of Nvidia's revenue from TPUs alone, according to the report.
With analysts' average estimate for Nvidia's revenue at $316 billion for next year, that would imply $31 billion in revenue for Google Cloud from TPUs. For reference, that's roughly half of Google Cloud's current run rate.
But selling TPUs is just a small part of Alphabet's overall artificial intelligence exposure. The company offers a full stack of AI services, ranging from consumer products to cloud computing infrastructure. Each piece of the puzzle supports the others, ensuring a bright future for the company and protecting it against competitive threats.
The full-stack AI company
Many saw the rise of AI chatbots like ChatGPT and Claude as big threats to Alphabet's Google Search business. Indeed, the company experienced slowing growth in search revenue in 2024, but this was not entirely out of the ordinary for the company. Importantly, that trend quickly reversed in 2025, as revenue reaccelerated, climbing 15% in the most recent quarter.
One big reason for the reversal is the growth of AI Overviews and Alphabet's improved monetization of the feature. AI Overviews provide an AI-generated summary of top search results for various queries. Management says the new feature increases overall engagement, and it's now monetizing search results with AI Overviews at the same rate as those without. As a result, they've proven accretive to its overall search revenue.
Alphabet is building on that momentum with the introduction of AI Mode, which pushes users into a chatbot interface with its Gemini AI. That could result in greater subscription revenue or more potential ads if Alphabet incorporates them into the chatbot.
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Key Data Points
That brings us to the second layer of Alphabet's AI stack. Gemini isn't just a fun chatbot for internet searchers. The Gemini foundation model is used by millions of developers, as are Alphabet's other models, Veo, Genie, and Nano Banana. Management counts over 13 million developers using its models for their apps.
The most recent iteration, Gemini 3.0 impressed many critics. In fact, OpenAI sees the new model as a serious threat to its most recent version of GPT, according to a report from the Wall Street Journal, citing an internal memo from CEO Sam Altman.
The third layer of the AI stack is Alphabet's TPUs, which it uses to train its models. As discussed, it rents out TPU servers via Google Cloud, which is the fourth layer down in the stack.
Google Cloud is growing quickly, with revenue up 34% in the most recent quarter. Its backlog climbed an impressive 82%, indicating a long runway for continued growth. Furthermore, Alphabet's seeing its operating margin expand for the business as it scales, which should mean even stronger earnings growth down the line.
Despite all the growth drivers and diversified revenue streams from AI, shares of Alphabet are still attractive, with a forward price-to-earnings (P/E) ratio of about 29. That's a premium to the market, but the company arguably deserves it, as its diversified revenue and full-stack operations make it less risky than other AI stocks. The company also continues to produce tens of billions in free cash flow each quarter despite heavy investments in AI compute. As a result, it wouldn't be a surprise to see Alphabet climb to $5 trillion relatively quickly in 2026.
