[2793] webpack alias not working

Here's the extension as suggested in community here:

module.exports = {
  /* Headers of the page */
  head: {
    title: '{{ name }}',
    meta: [
      { charset: 'utf-8' },
      { name: 'viewport', content: 'width=device-width, initial-scale=1' },
      { hid: 'description', name: 'description', content: '{{ description }}' }
    ],
    link: [
      { rel: 'icon', type: 'image/x-icon', href: '/favicon.ico' }
    ]
  },
  /* Customize the progress bar color */
  loading: { color: '#3B8070' },
  /* build stuff */
  build: {
    extend (config, { isDev, isClient }) {
        config.resolve = module.resolve || {}
        config.resolve.alias = module.resolve.alias || {}
        config.resolve.alias['@components']= './components/'
    }
  }
}

And here's the not so lucky output when running npm run-script build:

ERROR in ./node_modules/babel-loader/lib?{"babelrc":false,"cacheDirectory":false,"presets":[["my app path//node_modules//babel-preset-vue-app//dist//index.common.js",{"targets":{"ie":9,"uglify":true}}]]}!./node_modules/vue-loader/lib/selector.js?type=script&index=0!./pages/index.vue
Module not found: Error: Can't resolve '@components/AppLogo.vue' in 'my app path\pages'
 @ ./node_modules/babel-loader/lib?{"babelrc":false,"cacheDirectory":false,"presets":[["my app path//node_modules//babel-preset-vue-app//dist//index.common.js",{"targets":{"ie":9,"uglify":true}}]]}!./node_modules/vue-loader/lib/selector.js?type=script&index=0!./pages/index.vue 26:0-46
 @ ./pages/index.vue
 @ ./.nuxt/router.js
 @ ./.nuxt/index.js
 @ ./.nuxt/client.js

Any ideas on what's going on? I noticed a couple of things while battling this:

1. There are no resolve or alias objects, so they have to be added altogether.
2. Replacing the @ with ~ does not help.
3. If instead of ./components, path.resolve(__dirname, './components/') or path.join(__dirname, './components/') are used still would not work.

Using nuxt 1.3.0 which uses webpack 3.10.0 so I'm confused as to what could be wrong here. Also using windows 10.