Nvidia is losing ground as world's most valuable company, says report. Who can be the first to hit $6 trillion?

Alphabet's Google is rapidly closing the gap with Nvidia in the race to become the world's most valuable publicly listed company for the first time in over a decade, potentially overtaking AI chipmaker Nvidia within weeks, with its market capitalisation approaching $4.65 trillion after shares surged more than 140% over the past year, according to a new report by Barron's.

The development marks a striking shift in the fortunes of one of the world's most recognisable technology companies, whose shares have risen more than 140% over the past year, a pace nearly four times the gain posted over the preceding four years.

Google's stock now carries a market capitalisation of approximately $4.64 trillion, having added more than $2.6 trillion in value over the past year and nearly $900 billion since January alone.

Google Closing Gap With Nvidia as Market Cap Race Tightens

Nvidia currently holds the title of the world's most valuable company, with a market capitalisation of $4.85 trillion. The chipmaker crossed the $5 trillion mark for the first time in October of last year and reached a peak valuation of $5.27 trillion on 27 April.

However, Nvidia's share price gains have been broadly flat over the past six months, while Google has surged more than 36% over the same period. Based on recent trading momentum, the two companies could be separated by a razor-thin margin when Nvidia reports its first quarter earnings on 20 May.

Nvidia's average daily gain last month stood at approximately 0.66%, compared to 1.42% for Google. Should those trajectories hold through May, Nvidia would hold only a $190 million lead over Google in market value at the time of its earnings update, according to Barron's calculations.

Google shares were last marked at $381.80 each in late Friday trading, a marginal slip of 0.04%, giving Alphabet a market value of $4.65 trillion. Nvidia edged 0.2% higher to $199.99 per share, placing its market capitalisation just above $4.86 trillion.

Alphabet's AI Push Across Search, YouTube and Cloud Is Paying Off

The driving force behind Google's resurgence is its deepening integration of artificial intelligence across its three principal business divisions: internet search, YouTube, and Google Cloud. The company has spent $144 billion on capital expenditure over the past two years, with a further $490 billion allocated for the two years ahead.

Google Cloud's order backlog grew by nearly $220 billion in the most recent quarter, reaching a record high of $462 billion, Barron report says. Roughly half of that figure is expected to be realised within the next two years, bolstered in part by the company's recent entry into the chip sales market.

One analyst cited in the Barron's report noted that the latest quarterly results "reinforces our view that Google is a top AI play, with increasing search usage, improving ad targeting, durable cloud advantages, and growing subscription revenue from Gemini," adding: "We think AI tailwinds for search are still in early stages and future LLM improvements will drive durable growth."

Google Last Held the Top Spot in 2016, and Only for Two Days

The last time Google topped the S&P 500 market capitalisation rankings was in February 2016, when it briefly overtook Apple following a stronger than expected fourth quarter earnings report that lifted its total value to $560 billion. That reign lasted just two days before Apple reclaimed its position on 3 February.

With the biggest US technology earnings of the current cycle now reported, only Nvidia and Broadcom remain to publish results over the next two months, leaving the field relatively open for Alphabet's market capitalisation to advance further.

Nvidia's Vera Rubin Chips Could Yet Defend Its Crown

Nvidia is not without its own near-term catalysts. The company's next generation Vera Rubin chips are expected to begin shipping in the second half of this year, providing fresh impetus to a business already forecast to deliver revenue growth of 77% for the April quarter, according to Barron's.

Whether that proves sufficient to maintain Nvidia's lead over a surging Alphabet remains the central question preoccupying investors and analysts tracking the race to become the world's first six trillion dollar company.