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I think it would have been close. No denying cartridges was the main thing holding Nintendo back during that generation. The N64 would have gotten a lot more third party support if it was a cd based system. The games would also have been cheeper. However, Sony had a really strong marketing campaign and bought a lot of third party exclusives, that helped them a lot.
Besides, some of the most popular games on the N64 would not have been possible on a cd based system at the time due to the transfer speed. So Nintendo would also have lost an advantage.
All in all I think Nintendo would have won that generation with a CD based system, but it would not have been a landslide like some think.