This Trillion-Dollar AI Stock Has Seen a Steeper Increase in Market Cap Than Nvidia This Year. Is It a Buy?

Nvidia reached a major milestone last year. The artificial intelligence (AI) chip leader became the world's biggest company when it touched $4 trillion in market value. But the company didn't stop there. Nvidia has continued to advance and today remains the largest company -- but now at a value of more than $5 trillion.

Over the past few years, Nvidia, Apple , and Microsoft have each spent time in this leading position. In recent times, though, another AI giant has surpassed both Apple and Microsoft. And though this company is still less valuable than Nvidia, it actually saw a steeper increase in market cap than the AI leader so far this year. Is this trillion-dollar AI stock a buy now? Let's find out.

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This company plays a key role in the AI story, as it develops AI for its own use and offers AI products and services to customers through its cloud business. I'm talking about Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) . You may know this player best through something you might use every day: Alphabet's Google Search. And this has been the ticket to the lion's share of revenue over time -- Google sells advertising across its platforms, and companies are eager to buy as they know they can reach their audience there.

Alphabet today is using its Gemini large language model to power innovation across the Google platform, making search better and the advertising experience easier and more profitable for customers. All of this should support ad revenue growth moving forward.

But where the company truly stands out in AI is through Google Cloud, its cloud services business. Here, it offers customers access to Gemini, a wide variety of chips, and many other AI products and services. And this has supercharged cloud revenue. For example, in the recent quarter, Google Cloud revenue soared 63% to $20 billion. So Alphabet, along with Nvidia, is at the heart of this AI revolution, participating in a market that may reach beyond $2 trillion by the end of the decade.

So it's not exactly surprising that Alphabet stock has climbed, driving market value higher. So far this year, Alphabet's market cap has increased by 20% to $4.5 trillion. That's as Nvidia's has climbed 12%.

As mentioned, Alphabet's market cap surpassed that of Apple and Microsoft just a few weeks ago, making it the world's second-largest company. Apple has since gained the spot back, but by a very slim margin.