Alphabet (NASDAQ: GOOG) and Nvidia (NASDAQ: NVDA) have been on a tear this year, being the only two Magnificent 7 stocks to outperform the S&P 500 as of December 11.
Google’s parent company has been the most successful, its stock exploding 68.69% in the past 12 months and significantly outpacing even Jensen Huang’s money printer, as Nvidia shares have recorded a growth of ‘only’ 36.89% over the same period.
Conversely, the S&P 500 is up 13.81%, which puts it slightly above Apple (NASDAQ: AAPL) at 12.35%. Microsoft (NASDAQ: MSFT) is performing slightly worse, having gained exactly 7%.
Meta (NASDAQ: META) and Tesla (NASDAQ: TSLA) nearly form a pair, up 4.80% and 3.49%, respectively, while Amazon (NASDAQ: AMZN) comes in last with only a 1.9% uptick.
Google vs. Nvidia: Which Magnificent 7 stock will dominate?
While Nvidia is still virtually synonymous with artificial intelligence (AI) and related fields, the company is now facing some stiff competition from Google.
Most of the pressure comes from Google’s Tensor Processing Units (TPUs) now seen as a threat to traditional Graphics Processing Units (GPUs) since TPU-powered Gemini 3.0 models are beating their OpenAI’s peers in benchmarks, thus putting Nvidia’s chips in an awkward position.
What’s more, reports of Meta looking to explore multibillion-dollar deals with Google triggered a $250 billion wipeout in Nvidia’s market value late last November. Given the success, Google is now planning to more than double TPU output by 2028, further unsettling Nvidia investors.
It can be argued that Nvidia’s GPUs still retain an advantage in AI training thanks to their general-purpose flexibility and the industry’s familiarity with their architecture, while Google is deploying TPUs mostly for its internal businesses. However, considering Google’s scale and obvious potential for the technology, a more aggressive monetization strategy could be on the way.
Ultimately, it is likely product novelty that has resulted in the widening gap between the two Magnificent 7 stocks and allowed Google shares to outpace the S&P 500 so dramatically. Yet, despite the strong gains, Nvidia stock remains in charge on other fronts, as, for instance, AI developers such as OpenAI are still hesitant to commit to Google’s chips, as it would likely require them to back out of Nvidia’s flourishing data center business.
Featured image via Shutterstock
