The Smartest $500 You Can Put to Work in AI Right Now Isn’t Going Into Nvidia

Nvidia is often one of the first companies that come to mind when someone thinks of an artificial intelligence (AI) company. The once-mainly video game graphics company has become one of the most important AI companies in the world and is now the most valuable public company, with a market cap of over $5.4 trillion as of June 1.

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Even with Nvidia’s success and growth opportunities, it’s not the smartest AI stock to invest $500 in right now. That would be Google’s parent company, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Its returns for the year are identical to Nvidia’s (both up over 18%), but what sets it apart as an AI stock is its full-stack approach.

Reducing its reliance on third-party chipmakers

Many working parts come together for AI to work as it does today. While some companies operate in one part of the AI ecosystem, Alphabet has its hands in three key parts: chipmaking, cloud, and its own AI model, Gemini.

Data centers (the physical backbone of AI) can’t run without being powered by lots of advanced chips. Whether it’s Nvidia’s graphics processing units (GPUs) or AMD‘s accelerators, chips are to data centers what electricity is to a power grid.

Google has been designing its own…