Alphabet-owned Google just gained a leg up over OpenAI’s ChatGPT, according to recent stock market performance. Shares of Alphabet and its chip partner Broadcom are surging this quarter as its new version of Gemini AI was released, while proxies for the private OpenAI — Nvidia and Microsoft — underperform. Google, once considered an AI laggard, stunned the market last month with th e release of its Gemini 3 AI model , which surpassed and matched several of the capabilities of ChatGPT and GPT-family models in industry benchmark tests. Google also released its latest custom silicon chip, its 7th generation Tensor Processing Unit called Ironwood, in November and reports later emerged that the company is preparing to make its TPUs available for other companies beyond Google Cloud, adding another revenue stream for the search giant. Nvidia and OpenAI share a close relationship — Nvidia’s GPUs power much of OpenAI’s ChatGPT model, and the companies have a strategic partnership to deploy at least 10 gigawatts of AI data centers with a phased investment of up to $100 billion from Nvidia. Microsoft has been a major investor in OpenAI and owns almost a third of the newly structured for-profit entity. Since Google’s Gemini 3 model release on Nov. 18, the stock market has apparently decided Alphabet is now the AI leader. Wells Fargo chief equity strategist Ohsung Kwon pointed this divergence out to clients in a note this week, saying the valuations of the proxy stocks tell the tale. Shares levered to OpenAI’s ChatGPT model and to Nvidia graphics processing units (GPUs) are for the first time since 2016 trading at a discount compared to those levered to Google’s Gemini AI model and the search company’s custom Tensor Processing Units (TPUs), per their relative forward price-to-equity ratios, according to Kwon. “Now, Gemini/TPU stocks trade at a premium relative to ChatGPT/GPU peers for the first time in nearly a decade — the market is saying GOOGL is winning the AI race,” Kwon wrote the note to clients. ‘Code Red’ OpenAI chief executive officer Sam Altman may be getting the message the market is sending. Altman told employees on Monday that the company is announcing a “code red” effort to improve the quality of ChatGPT and is delaying other products to focus on that effort, according to a Wall Street Journal report . OpenAI has been facing pressure from Gemini’s quickly climbing user base, which was at about 650 million in October compared to 450 million in July. Nvidia is similarly battling concerns about Google’s in-house chips. Some investors think Google’s TPUs could take away Nvidia’s chip dominance, particularly after a report claimed that one of Nvidia’s biggest customers, Meta, is exploring using Google’s chips for its data centers. Nvidia, after seeing its stock fall 3% on the reports, said in a recent X post that it “is a generation ahead of the industry” with more powerful chips than Google. GPUs serve a wide range of parallel computing tasks, while TPUs are used for specialized tasks. “The enthusiasm may be overdone, but what’s certain is that AI is no longer a tide that lifts all boats,” Kwon continued. “The trade is becoming more nuanced and idiosyncratic: the average pairwise correlation of stocks in the Nasdaq 100 have plummeted to 14%, an all-time low, suggesting winners and losers are starting to emerge.” Alphabet stock significantly outperformed its ‘Magnificent 7’ peers during the month of November, which saw several tech stocks sell off. Shares of the Google parent have rallied more than 66% this year and are up about 30% this quarter. Investors can look at Broadcom’s surge as also a sign of soaring interest in TPUs, which are a kind of application-specific integrated circuit, or ASIC. Broadcom has long helped design and manufacture Google’s chips and dominates the market for custom ASICs. Its now up about 65% year to date. GOOGL NVDA,AVGO 1Y mountain One-year stock performances of Google parent Alphabet, Nvidia and Broadcom. Nvidia, meanwhile, has fallen under pressure after two years of blockbuster gains. The stock is up about 35% year to date, but down more than 2% this quarter.
The stock market believes Google is now winning the AI race over OpenAI, Nvidia
Dec 2, 2025
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