The AI-driven rally in U.S. tech stocks continues to gather steam, with Google parent Alphabet Inc. (GOOG，GOOGL) leading the charge with a dominant performance, inching closer to claiming the title of the world’s largest company by market capitalization. According to Bloomberg, Alphabet’s surging share price has positioned it at a critical juncture to overtake the current leader, Nvidia, sparking intense market divergence as the stunning rally has even drawn bubble risk warnings from a legendary “Big Short” investor.
Alphabet’s gains have been nothing short of spectacular, outpacing its tech peers by a wide margin. Data shows the stock has soared approximately 150% over the past 12 months, nearly doubling the growth of Nvidia, the current market cap leader, far exceeding market expectations. On a shorter timeframe, Alphabet has jumped 26% in the past month, firmly leading the Magnificent 7 group of top U.S. tech giants. Its gains have also reached over 22% in the past three months and surpassed 27.33% year-to-date, outperforming major tech players including Nvidia, Apple, Microsoft, and Tesla across the board.
The two companies’ market caps would have been neck and neck last Friday if Nvidia had not staged a three-day rally to close out the previous week, underscoring Alphabet’s unstoppable momentum in its quest to claim the top spot.
Alphabet’s sustained strength is underpinned by solid fundamental performance and a clear AI growth narrative. In the first quarter of 2026, the company reported revenue of $109.9 billion, a 22% year-over-year increase that significantly beat market estimates. Its core businesses delivered robust results across the board: Google Cloud’s quarterly revenue exceeded $20 billion for the first time, achieving rapid growth to become a key growth engine, while mature segments such as Search and YouTube also maintained steady performance, forming a diversified growth base. Google Cloud’s revenue surged 63% year-over-year, with its backlog nearly doubling sequentially to $462 billion, locking in long-term growth momentum.
In the AI sector, Alphabet is sparing no effort to strengthen its long-term dominance. The company plans to allocate a massive $180 billion to $190 billion in capital expenditure in 2026, focusing on AI infrastructure, data centers, and self-developed chips to consolidate its advantages in the full-stack AI ecosystem. Its CFO also noted that capital expenditure is expected to grow significantly in 2027 to meet unprecedented demand for AI computing resources. Luke O’Neill, an analyst at CooksonPeirce, commented that Alphabet’s deep penetration into all core links of the AI ecosystem, combined with the synergistic advantages of its diversified businesses, positions it to be the biggest winner in the AI wave.
Sentiment toward Alphabet in the secondary market is overwhelmingly bullish. Among Wall Street analysts covering the stock, none have issued a sell rating, and more than 80% have given it a “Strong Buy” rating. The industry is unanimously optimistic about its AI commercialization progress and sustained performance growth potential, with analysts projecting ample room for further upside. Some analysts have set target prices as high as $500, reflecting confidence in its long-term value.
However, amid the extreme market enthusiasm, risk warnings have emerged as expected. Michael Burry, the renowned “Big Short” investor who accurately predicted the subprime mortgage crisis, has publicly warned that the current AI-driven speculative rally led by Alphabet feels eerily similar to the final phase before the 1999-2000 dot-com bubble burst. He stated bluntly that the current surge in U.S. tech stocks is not driven by economic data, employment conditions, or consumer sentiment, but purely by market momentum and sentiment. Burry noted that financial media coverage is dominated by non-stop discussions about AI, a single narrative that hides significant risks.
Overall, supported by strong earnings, comprehensive AI layout, and massive capacity investment, Alphabet has a clear and powerful logic for market cap breakthrough, firmly establishing itself as a leader in the U.S. tech sector. Yet against the backdrop of extreme bullish sentiment and overextended market expectations, Burry’s bubble warning serves as a wake-up call for investors. The sustainability of the AI bull market and potential correction risks have become the core focus of current market speculation.
