Alphabet Targets Nvidia with New Inference Chips as Cloud Revenue Jumps 48%
Google Cloud revenue rose 48% year-over-year and Alphabet’s 31x P/E compares to Nvidia’s 41x and Palantir’s 200x, while 2026 capital spending is set at $175–185 billion. The company is launching inference AI chips to challenge Nvidia and secured a $1 billion-per-year deal to integrate its Gemini model into Apple’s Siri.
1. Google Cloud Outperforms with 48% Growth
Google Cloud revenue rose 48% year-over-year, driven by increased enterprise adoption of its infrastructure and platform services. This robust growth underpins Alphabet’s 31x P/E valuation, positioning the segment ahead of competitors with higher multiples.
2. Aggressive Capex Plan for 2026
Alphabet has earmarked $175–185 billion in capital expenditures for 2026, reflecting ongoing investments in data centers, network infrastructure, and AI hardware. While this spending may temper free cash flow in the near term, it supports long-term scalability and AI innovation.
3. AI Chip Strategy and Key Partnerships
The firm is rolling out new inference-optimized AI chips designed to run models post-training, directly challenging Nvidia’s market dominance in this segment. It also secured a $1 billion-per-year partnership to embed its Gemini AI model into Apple’s Siri, diversifying revenue and strengthening its AI ecosystem.