By Christine Ji
Google's growing cloud and chip business could help Alphabet dethrone Apple and become the world's second largest company
Alphabet's stock got another boost on Tuesday on a report that it could supply chips to Meta.
After surging 16% since the beginning of November, shares of Alphabet look like they have plenty more room to run. That means the other &#34;Magnificent Seven&#34; names need to watch out.
Last week, Alphabet (GOOGL) (GOOG) soared past Microsoft (MSFT) in market capitalization to become the third-biggest U.S. company. Now, as Alphabet draws near a $4 trillion market capitalization, Apple (AAPL) could be next to fall down the ranks.
On Tuesday morning, Alphabet's market cap was $3.93 trillion, right on the heels of Apple's $4.11 trillion. Alphabet hasn't had a larger valuation that Apple since Jan. 29, 2019 and hasn't held the No. 2 spot by market cap since Feb. 26, 2018, according to Dow Jones Market Data.
The current gap between the two, at $185 billion, is the narrowest spread since Oct. 3, 2019, the data showed.
Alphabet's strong stock gains stand in stark contrast to a roughly 2% drop for the S&amp;P 500 SPX in November. Alphabet and Apple are also the only &#34;Magnificent Seven&#34; names in positive territory for the month, with Alphabet's momentum putting it further in the lead as the best-performing &#34;Mag Seven&#34; name of 2025.
Shares of Alphabet are ahead about 2% in Tuesday action after The Information reported that the company was in talks to rent its custom tensor processing units to Meta (META) - a deal that could be worth billions and eat into Nvidia's (NVDA) dominance in the chip market. While Google has primarily used its TPUs for internal training, it's begun to explore renting them out to third parties, as evidenced by its AI cloud partnership with Anthropic earlier this year.
Read on: Alphabet's stock rises as possible Meta chip deal highlights new twist in the AI trade
In a note Tuesday morning, D.A. Davidson's Gil Luria wrote that Google's TPU and DeepMind segments combined would be worth nearly $1 trillion alone, making them one of Google's &#34;most valuable businesses.&#34;
Prior to the TPU rumors, Google already was picking up artificial-intelligence momentum with its launch of Gemini 3 and Nano Banana Pro last week. Many viewed the developments as a sign that Google's frontier models are catching up to OpenAI's ChatGPT.
BNP Paribas analyst Nick Jones believes that Google's Search and Cloud businesses could drive the stock even higher. In a Monday note, Jones initiated coverage on Alphabet's stock with an outperform rating and a price target of $355, calling the Google parent &#34;one of the best positioned companies to benefit in the AI race.&#34; Jones believes Google Cloud can grow its global market share to 11.4% in 2029 from 8.0% in 2025, which could provide a significant boost to Google's revenues.
While Alphabet's stock currently trades at a 2027 price-to-earnings multiple of 22x, Jones believes it &#34;does not reflect its vertically integrated technology stack, consumer and enterprise usage of its products and dominant advertising platforms.&#34; His price target reflects a 28x P/E multiple.
Also read: These two 'Magnificent Seven' stocks could be the strongest survivors of an AI apocalypse
-Christine Ji
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
11-25-25 1017ET

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<p>Alphabet's stock is nearing a $4 trillion market cap, challenging Apple's $4.11 trillion. Alphabet's growth in cloud and chip business, including potential deals with Meta, boosts its stock. Analysts see Alphabet's AI advancements and cloud market share growth as key drivers. Alphabet's stock has surged 16% since November, outperforming the S&P 500 and other 'Magnificent Seven' stocks.</p>

- Alphabet's stock has surged, nearing a $4 trillion market capitalization, potentially overtaking Apple as the second-largest company globally.  
- The company's growth is fueled by its cloud and chip business, including a possible deal to supply chips to Meta, which could challenge Nvidia's market dominance.  
- Analysts predict significant revenue growth for Alphabet, with expectations for its cloud market share to rise from 8.0% in 2025 to 11.4% by 2029, enhancing its valuation.

Alphabet's stock is getting closer to this huge milestone. Why Apple should watch out.