NVDA at $204.12 is up +8.22% YTD and +25.49% over 52 weeks, trading at 30.1x TTM P/E with a $4.944T market cap — still the undisputed hardware backbone of the AI buildout, but facing real competitive noise from Cerebras in Europe and a French antitrust probe nearing completion. GOOGL at $361.92 is the more surprising story: +105.50% over 52 weeks, +14.99% YTD, trading at 28.0x TTM P/E on $422.5B in TTM revenue, and rapidly closing the valuation gap with NVDA despite being a revenue machine nearly 70% larger in top line. The relative valuation here is instructive — and slightly unsettling for NVDA bulls.
Let's start with the number that keeps me up at night: Nvidia's market cap is $4.944T on $253.5B in TTM revenue, implying a P/S of 19.5x. Google's market cap is $4.416T on $422.5B in TTM revenue at a P/S of 10.5x. You are paying nearly double the revenue multiple for NVDA versus GOOGL despite GOOGL generating 67% more revenue. Now, I understand the bull case — Nvidia's profit margins are stratospheric (62.97% at the gross level), and its position as the irreplaceable silicon layer of the AI stack commands a scarcity premium. But at 30.1x TTM P/E and 24.1x EV/EBITDA, the market is pricing in near-perfection on execution for years to come. The question isn't whether Nvidia is a great company — it clearly is — the question is whether the current price already owns that greatness.
The competitive noise is getting louder. Cerebras is now targeting Europe with a multibillion-dollar expansion and 200MW of AI compute capacity by end of 2027, directly positioning itself as an alternative to Nvidia in a geography that is increasingly motivated to reduce dependency on American chip supply chains. This isn't existential for NVDA — Cerebras doesn't have Nvidia's software moat (CUDA), its ecosystem depth, or its manufacturing scale. But it adds to a pattern: AMD is pushing, custom silicon from Alphabet's TPUs and Amazon's Trainium is maturing, and now Cerebras is planting a flag in Europe. Meanwhile, the French competition authority's probe into Nvidia's alleged anti-competitive practices is nearing completion. No timeline, no conclusions disclosed yet — but regulatory overhangs in the EU are not a nothing-burger for a company this dominant in a strategically sensitive sector. Watch this space.
On the more constructive side for NVDA: analysts are reportedly raising profit estimates for upcoming quarters even as the stock trades at what one source characterizes as pre-AI boom valuation levels. That's the classic setup for a re-rating — depressed sentiment, improving fundamentals, and a crowded-short dynamic (short ratio of just 1.72 suggests the market isn't actually positioned aggressively bearish). The beta of 2.211 means NVDA amplifies whatever the broader market does, which cuts both ways. In a risk-on July, NVDA's +3.65% single-day move today is exactly the kind of move that reminds you why volatility can be your friend if you're positioned correctly.
Now for the real surprise of this post: GOOGL at +105.50% over 52 weeks is one of the most remarkable performance stories in the Mag 7 over the past year, and it's not getting enough credit. At 28.0x TTM P/E, you are getting $422.5B in revenue, a 37.92% profit margin, and a company that is aggressively embedding AI into Search (AI Overviews), Cloud (Google Cloud with Gemini), and its own hardware stack (TPUs). The EV/EBITDA of 19.8x is notably cheaper than NVDA's 24.1x, and the P/B of 9.2x versus NVDA's 24.1x tells you something important about underlying asset value. GOOGL's beta of 1.247 is also dramatically lower than NVDA's 2.211, meaning you get meaningful AI exposure without taking on chip-cycle volatility. For institutional portfolios that need AI beta but can't absorb NVDA-level drawdowns, GOOGL is increasingly compelling.
My bottom line: both NVDA and GOOGL deserve to be in AI-focused portfolios, but the relative value argument has shifted meaningfully in GOOGL's favor. NVDA's hardware dominance is real and durable, but the valuation asks you to believe that no competitor gains meaningful ground, no customer in-sources chip capacity at scale, and no regulatory body materially disrupts its go-to-market — all simultaneously. GOOGL, by contrast, trades at a discount to NVDA on every major multiple while generating more revenue, carrying lower volatility, and demonstrating that its AI integration is driving real monetization at scale. The 52-week return differential — +105.50% for GOOGL versus +25.49% for NVDA — is the market beginning to figure this out. I'd be adding to GOOGL on weakness and trimming NVDA into strength at these levels.