Nvidia vs. Alphabet: The AI Revolution Is Big Enough for Both. Here’s the Better Buy. | The Motley Fool

The artificial intelligence (AI) revolution keeps delivering winning stocks driven by that technology. Since AI encompasses so many niches within tech, it will make numerous investors better off, and the gains will not be limited to just one investment.

Nvidia (NVDA -4.14%) and Google’s parent company, Alphabet (GOOGL +1.23%) (GOOG +0.78%), are two notable winners. The latest iteration of AI is built on Nvidia’s hardware, while Alphabet has long innovated in the field, and the success of its most notable businesses relies heavily on AI.

Still, between the two tech stocks, I believe Alphabet may have the slightly brighter future. Here’s why.

So why not Nvidia?

Admittedly, it is difficult to go against Nvidia in any AI race. Its AI accelerators power generative AI, and while other competitors have emerged over time, Nvidia’s hardware remains dominant.

In the first two quarters of fiscal 2027 (ended July 26), that dominance drove a 96% year-over-year increase in revenue for the company. This is not an anomaly, as the growth of Nvidia’s AI accelerator business has been unprecedented in recent years.

Amid that growth, the stock has gained 1,460% from its October 2022 low. That gave it the world’s largest market cap and a surprisingly modest price-to-earnings (P/E) ratio of 23, below the S&P 500 average earnings multiple of 26.

Nonetheless, the immediate problem is how the…