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Nvidia First to Cross $4 Trillion Market Cap
Nvidia has become the first company in history to reach a market cap of $4 trillion, continuing to drive growth in the megacap stocks sector. Meanwhile, Alphabet (NASDAQ: GOOGL) is currently valued at $2.8 trillion and is considered the most undervalued among the “Magnificent Seven” stocks, with potential to become the first to reach a $5 trillion market cap.
Alphabet’s Growth in AI and Cloud Services
Despite early concerns about its position in the AI sector, Alphabet has launched one of the leading generative AI models, Gemini. Throughout Q2, Google Search generated a 12% revenue growth, while Google Cloud’s revenue surged 32% year-over-year to $13.6 billion, with an improved operating margin from 11% to 21%. Alphabet’s stock trades at 21.5 times forward earnings, which is below many peers.
Future Outlook
To reach a market cap of $5 trillion in five years, Alphabet needs an approximate 80% valuation increase. Analysts suggest that if Alphabet can achieve a 15% annual earnings growth rate and adjust its forward earnings valuation to 25 times, it could exceed a $6 trillion market cap.
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