Prediction: 1 Artificial Intelligence (AI) Stock That Will Outperform Nvidia in 2026 | The Motley Fool

Nvidia has been one of the best-performing stocks in the current bull market. The stock has increased by more than 1,000% since the release of ChatGPT, which kicked off the artificial intelligence (AI) spending spree among big tech stocks. Nvidia has been a huge beneficiary of the growing spend on artificial intelligence infrastructure, as its GPUs are best in class for training large language models.

Despite its status as the largest company in the world with a market cap of around $4.5 trillion, analysts think Nvidia could keep climbing higher in 2026. The median price target on the stock is $250, about 30% higher than the stock price as of this writing. That would make it a $6 trillion company.

But another AI leader looks poised to outperform the chipmaker in 2026 thanks to its momentum across hardware, software, and real-world applications of AI. Here’s why I expect Alphabet (GOOG 0.23%) (GOOGL 0.18%) to outperform Nvidia next year.

Challenging the AI leaders

Alphabet has made tremendous progress in artificial intelligence in 2025, and that should show up in continued financial strength in 2026.

Its Google Cloud division saw revenue growth accelerate to 34% last quarter while its operating margin continued to expand, reaching 24%. Those trends should continue in 2026, as management reported a backlog of $155 billion at the end of the third quarter, up 46% year over year.

Alphabet is seeing notably strong demand for its custom-built…