Google Stock Is Overbought: Alphabet’s AI Revolution, Rivalry with Nvidia, and Stocks to Watch

Google stock has surged to new highs as the parent company Alphabet approaches the $4 trillion market cap landmark. This remarkable rally is powered by a mix of high-profile product launches—including the Gemini 3 AI model, announcements on Google Nano Banana Pro for generative AI, and new intelligent agent platforms. Additional headlines, such as Google entering advanced talks with Meta Platforms for a multi-billion dollar AI chip deal, have amplified investor enthusiasm. Combined with institutional buying and a re-energized cloud business, these factors are making Google stock one of the hottest tech investments of 2025.

In this article, we’ll explore Google’s latest product innovations, its bold moves to rival Nvidia in the AI chip sector, why analysts say Google stock may be overbought, and which related companies could benefit or face risks as Alphabet reshapes the technology landscape.

Google’s Bold Play: Challenging Nvidia’s AI Chip Dominance

Traditionally, Nvidia’s graphics processing units (GPUs) have been the gold standard for AI development. However, Google is now directly challenging Nvidia's dominance by leveraging its homegrown tensor processing units (TPUs)—custom AI chips purpose-built to boost machine learning performance at an unprecedented scale.

The competitive threat became more tangible after reports confirmed Google is in advanced talks with Meta Platforms (NASDAQ:META), the parent of Facebook, for Meta to spend billions procuring Google's TPUs for its data centers beginning in 2027. This marks a pivotal shift: whereas Google previously only rented access to its TPUs through its cloud platform, it now aims to sell the chips externally—targeting not only Meta but also a broader swath of cloud customers.

Analysts estimate that, if Google's push is successful, its AI chip business could grab as much as 10% of Nvidia’s annual revenue, with some suggesting the TPU division, together with Google DeepMind, might eventually be valued at over $900 billion.

The move has not only unnerved Nvidia—whose shares tumbled 5% following the news—but also cast a shadow over Nvidia rival Advanced Micro Devices (NASDAQ:AMD), which dropped over 7% as investors recalibrated expectations around the competitive landscape.

Google’s success hinges on whether its TPUs can truly rival Nvidia’s GPUs in terms of power efficiency and raw compute, as well as on market acceptance from AI developers and leading internet companies. Nonetheless, the fact that Meta and even AI leaders like OpenAI and Anthropic have trialed Google’s chips this year highlights the seriousness of this competitive dynamic.

Is Alphabet Stock Overbought?

Alphabet's stock rally—almost 69% year-to-date at its peak—makes it the best-performing “Magnificent Seven” stock so far this year. With such staggering returns, questions around valuation have surfaced. According to technical analysts, Alphabet's 14-day Relative Strength Index (RSI) recently touched 75, significantly above the 70 threshold that often signals an overbought condition. This raises the risk of a near-term correction for investors entering at these levels.

Nevertheless, large institutional investors, including ARK Invest and even Warren Buffett's Berkshire Hathaway, have continued to add to their Alphabet positions, suggesting strong conviction in its long-term trajectory. In October, ARK Invest reportedly snapped up 174,293 Alphabet shares—an investment of approximately $56.4 million—as its AI narrative gained further traction with the launch of new Gemini models and next-generation TPUs.

The Google Chain: Key Stocks Benefiting from Google’s AI Expansion

Alphabet's AI surge is having a profound impact on both its supply chain and strategic partners. Several companies stand to benefit from—or be disrupted by—Google’s AI ambitions, making them compelling to watch for investors tracking the evolving AI ecosystem:

• Broadcom Inc. (NASDAQ:AVGO): As Google's longstanding ASIC design and manufacturing partner for TPUs, Broadcom saw its shares soar 11% on news of Google’s expanded AI chip push. Analysts are re-rating the ASIC market, with Broadcom at its center, as bespoke silicon becomes essential for hyperscale AI workloads.

• Meta Platforms, Inc. (NASDAQ:META): Poised to become one of Google’s largest TPU customers, Meta’s $113 billion projected capital expenditure through 2026 signals its intent to stay at the forefront of AI infrastructure—even as it contends with rising Google competition.

• Microsoft Corporation (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Oracle (NYSE:ORCL): Each of these cloud titans has invested heavily in proprietary AI chips, but Google's vertical integration places it in a unique position. A successful Google AI stack could erode these competitors' AI cloud market share and reshape enterprise adoption patterns.

• Lumentum and Amphenol: Suppliers of optical networking and hardware components that form key parts of Google’s TPU supply chain, poised to benefit as Alphabet ramps production.

• Salesforce (NYSE:CRM), Palo Alto Networks (NASDAQ:PANW), MongoDB (NASDAQ:MDB), Adobe (NASDAQ:ADBE): Major software, security, and consulting partners that collaborate with Google Cloud to deliver AI-enabled products and solutions. Gains in Google’s AI business often translate to new business and deeper integration across these firms.

Outlook: Can Google “Rewrite” the AI Playbook?

Google’s aggressive push to vertically integrate—from bespoke chips (TPU) to foundational models (Gemini 3) and advanced AI platforms (Nano Banana Pro, Google Antigravity)—marks it as the most deeply entrenched AI “hyperscaler.” Analysts caution that if Alphabet decisively “wins” the AI arms race, it could structurally damage the prospects of many popular AI stocks, upending sector leadership and capital flows.

Much like how AOL’s “walled garden” model in early internet days was ultimately replaced by superior, integrated experiences, Google’s full-stack approach poses a direct challenge to intermediaries like OpenAI and the traditional AI supply chain centered on Nvidia. This paradigm shift is already forcing a re-evaluation among investors about where the future value in AI will accrue.

However, the AI landscape is still nascent, and the ultimate victors remain TBD. While Alphabet’s momentum is powerful, would-be winners—and losers—must remain agile as the competitive chessboard is redrawn in real time.