The Daily Breakdown looks at the market’s major storyline between Alphabet and Nvidia, as the AI race continues to heat up.
Before we dive in, let’s make sure you’re set to receive The Daily Breakdown each morning. To keep getting our daily insights, all you need to do is log in to your eToro account.
What’s Happening?
Alphabet’s reputation in the AI race has long lagged Nvidia’s, but that perception may be shifting. Alphabet shares are up about 70% this year and 55% in the past three months. It helps that its core business — Search — is doing just fine, something that investors worried about when ChatGPT came along. But the company also has a formidable path into AI as well with its Gemini model.
Growing Confidence in Alphabet
On Tuesday, Nvidia sold off while Alphabet rallied on reports that Meta may use Alphabet’s chips in its datacenters in 2027. It was enough to spark a brief shake-up, and with Alphabet nearing a $4 trillion market cap, it’s now the world’s third most valuable company — not far behind Nvidia.
Nvidia in the Crosshairs?
The narrative suggests a direct Alphabet-vs-Nvidia showdown, but that’s oversimplified. Google has spent a decade refining its TPUs, originally built for Search and later customized for AI through feedback from its DeepMind and Gemini teams. Even so, Alphabet remains an Nvidia customer, and Nvidia is still widely considered the gold standard for AI chips. Competition was always inevitable — but Nvidia’s leadership isn’t disappearing anytime soon.
Want to receive these insights straight to your inbox?
The Setup — Nvidia & Alphabet
Below shows the year-to-date performance of both Nvidia and Alphabet, but Alphabet’s 15% rally this month and Nvidia’s 12% fall have created quite the divergence on the charts.
This duo has spent most of 2025 moving in tandem. They sank through Q1 together, then rallied hard in Q2 and Q3. In fact, they were on a similar trajectory as they came into November — but as the chart highlights, that correlation has faded significantly.
With the decline, Nvidia now finds itself trading back near a trough valuation. Will it be enough to attract bulls back to this name?
What Wall Street’s Watching
IWM
The Russell 2000 was quietly the best-performing US index on Tuesday, gaining more than 2% on the day. The IWM ETF is now up 7% in the last three trading sessions, as bulls bid up small cap stocks ahead of improving prospects for 2026 and on hopes that the Fed will lower interest rates in December. Check out the charts for IWM.
Shares of Deere are under pressure this morning, falling about 5% in pre-market trading as investors digest the company’s quarterly results. While Deere delivered a Q4 top- and bottom-line beat, management’s outlook for the coming year was below analysts’ expectations. Dig into the fundamentals for Deere.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.