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Hi Fellow Investors,

Nvidia (NASDAQ: NVDA) continues to ride unprecedented AI infrastructure spending, but new competition is quietly emerging.

Alphabet (NASDAQ: GOOGL) is exploring a bold shift that could fundamentally challenge Nvidia’s dominance.

The race to end 2026 as the world’s largest company is officially down to two players.

Key Points:

• Nvidia’s data-center demand remains “sold out,” reinforcing its 2026 growth trajectory.

• Alphabet may begin selling its custom TPUs externally, creating a powerful new revenue engine.

• AI infrastructure spending is accelerating through 2027, raising the stakes for both giants.

Nvidia’s AI Engine Continues to Outpace Every Competitor

Nvidia remains the preferred computing supplier for every major hyperscaler, and its GPU demand is nowhere near slowing.

Record AI capex in 2025 is set to be surpassed again in 2026, creating a powerful multiyear spending cycle.

The company revealed that cloud GPUs remain fully “sold out,” showcasing unmatched demand and tight supply conditions.

Nvidia’s 62% year-over-year revenue surge last quarter shows that AI workloads are scaling faster than analysts expected.

Its long-term projection for $3 trillion to $4 trillion in global data-center capex by 2030 further strengthens its growth visibility.

If 2027 spending is also guided higher, Nvidia could extend its lead as the world’s most valuable company.

Strengths

• Nvidia dominates the AI GPU market with unmatched ecosystem scale and performance leadership.

• Cloud GPU shortages reinforce strong pricing power and sustained revenue acceleration.

• Long-term AI infrastructure spending through 2030 gives Nvidia extraordinary growth runway.

Weaknesses

• High pricing and supply constraints create opportunities for rival computing platforms.

• Extreme dependence on hyperscaler spending introduces cyclical revenue risk.

• Any slowdown in AI infrastructure investment could rapidly compress demand.

Potential

• New AI systems, networking, and software layers could unlock multibillion-dollar revenue expansion.

• Continued GPU scarcity may push Nvidia’s margins even higher into 2026.

• If 2027 AI capex guidance hits new highs, Nvidia could widen its market-cap lead even further.

Alphabet’s TPU Strategy Could Trigger a Massive Business Model Shift

Alphabet has spent years refining its Tensor Processing Units, which deliver high-efficiency AI computing at a lower cost than GPUs when optimized correctly.

Until now, TPUs were kept mostly internal or leased through Google Cloud, giving Alphabet an operational advantage but not a hardware revenue stream.

Reports that Meta may purchase TPUs indicate Alphabet is considering a major new line of business.

This would diversify revenue beyond advertising, which still dominates its financials despite a 15% rise in Search last quarter.

If external TPU sales gain momentum in 2026, Alphabet could begin challenging Nvidia’s data-center computing supremacy.

Alphabet’s combination of mature advertising growth and emerging hardware monetization makes it a legitimate contender for the 2026 global crown.

Strengths

• TPUs offer high-performance AI computing at lower cost, making them attractive to major enterprise buyers.

• Alphabet’s massive ecosystem in Search, Cloud, and AI research provides stable long-term demand.

• Diversifying beyond advertising strengthens Alphabet’s revenue durability.

Weaknesses

• Advertising still drives most revenue, exposing Alphabet to cyclical marketing budgets.

• TPU commercialization requires new supply chains, partnerships, and sales execution.

• Nvidia’s head start and entrenched position remain difficult to disrupt quickly.

Potential

• External TPU sales could create a multibillion-dollar hardware business by late 2026 or 2027.

• Growing cloud adoption positions Google Cloud as a key platform for AI workloads.

• If Alphabet scales TPU distribution successfully, it could close the valuation gap with Nvidia rapidly.

Conclusion

Nvidia remains the strongest candidate to finish 2026 as the world’s largest company, backed by unprecedented AI infrastructure demand.

Alphabet’s TPU commercialization could become a powerful catalyst, but it requires significant execution before challenging Nvidia’s throne.

Investors should watch AI spending trends closely, as they will ultimately determine which tech titan takes the crown.

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