Key Takeaways
- Nvidia and Alphabet are two top artificial intelligence (AI) stocks to buy right now
- Nvidia is well-positioned to see strong growth from the ongoing AI data center buildout, with a 90% market share in the GPU space
- Alphabet has a big cost advantage due to its custom AI chips, and is incorporating its Gemini AI model throughout its product ecosystem
- Both stocks are reasonably priced, with forward price-to-earnings (P/E) ratios of under 25 times next year’s analyst estimates
- Nvidia and Alphabet have a strong potential for growth, with Nvidia’s recent acquisitions and Alphabet’s distribution advantage
Introduction to AI Stocks
After a strong run in 2025, artificial intelligence (AI) stocks are poised to continue their momentum in 2026. As the demand for AI technology continues to grow, companies like Nvidia and Alphabet are well-positioned to reap the rewards. According to the article, "Nvidia (NVDA 2.09%) is well positioned to see strong growth coming from the ongoing AI data center buildout." This is due to its dominance in the GPU space, with a 90% market share, and its recent acquisitions, including the maker of open-source AI orchestration software Slurm.
Nvidia’s Dominance in AI
As the "king of AI infrastructure," Nvidia is set to benefit from the ongoing AI data center buildout. Its graphics processing units (GPUs) are the main chips used to power AI workloads, and with large language makers, cloud computing companies, and governments spending aggressively on AI infrastructure, Nvidia is likely to see strong growth. The company’s CUDA software platform is also a major advantage, as it is where most AI code is written and optimized for its chips. As the article notes, "Nvidia has garnered an approximate 90% market share in the GPU space, largely due to its CUDA software platform." Additionally, Nvidia’s recent acquisition of Groq, a chipmaker that has developed a chip designed specifically for AI inference, should help complement the dominance of its GPUs in the AI training market.
Alphabet’s Advantage in AI
Alphabet, on the other hand, has a big cost advantage due to its custom AI chips, which are designed specifically for its ecosystem. The company’s Tensor Processing Units (TPUs) are ASICs, which are pre-programmed chips created to handle specific tasks. As the article notes, "TPUs cannot only be optimized for performance, but they also consume less energy." This allows Alphabet to train and run inference for its world-class Gemini AI model more cheaply than competitors. Additionally, Alphabet is incorporating Gemini throughout its product ecosystem, including in Google Search, where it has introduced both AI Overviews and AI Mode. As the article notes, "AI Mode is essentially having an AI chatbot built inside of Google, and users can easily shift between traditional search and an AI chatbot without ever having to switch apps."
Valuation and Growth Potential
Both Nvidia and Alphabet are reasonably priced, with forward P/E ratios of under 25 times next year’s analyst estimates. As the article notes, "Stocks with positive PEGs below 1 are typically considered undervalued." Nvidia’s valuation and growth opportunities make it a top AI stock to buy, while Alphabet’s distribution advantage and strong growth in its cloud computing business make it an attractive long-term investment. As the article concludes, "Given its current position as the company with the most comprehensive AI stack, this is a stock to buy for the long term." With their strong potential for growth and reasonable valuations, Nvidia and Alphabet are two top AI stocks to buy right now.
https://www.fool.com/investing/2026/01/08/2-top-artificial-intelligence-stocks-to-buy-right/