The surge in artificial intelligence (AI) has established major players in the tech sector, particularly Nvidia and Alphabet, who are poised for sustained growth. These companies are leading the charge as they leverage their strengths to capitalize on the ongoing AI boom.
Nvidia, which commands an impressive 86% market share in AI data center processors, is experiencing exponential growth in revenue due to the soaring demand for AI infrastructure. The company’s latest earnings report indicated over $51 billion in data center sales for the third quarter alone, representing a remarkable 67% increase compared to the previous year. Despite concerns about a potential slowdown in AI spending, major tech companies including Meta Platforms, Microsoft, and Amazon are increasing their capital expenditures significantly, contributing to a collective investment in data center infrastructure exceeding $650 billion. This trend solidifies Nvidia’s dominance, with its processors running on CUDA software, providing the company an “incumbency advantage” in the market.
As for Alphabet, the tech giant is also navigating the AI landscape effectively. Its Google Cloud segment witnessed a 48% rise in sales during the fourth quarter, reaching $17.7 billion. Alphabet’s recent collaboration with Apple, which entails a $1 billion annual deal for the use of Google’s Gemini chatbot technology in Siri, further enhances its position in the competitive AI space. Notably, Gemini has shown significant growth, boasting 750 million monthly active users, a substantial increase from 400 million in mid-2025, indicating its potential to rival leaders like OpenAI’s ChatGPT.
Furthermore, Alphabet plans to more than double its capital expenditures this year to as much as $185 billion, primarily aimed at enhancing data center infrastructure. This investment will help Alphabet maintain its competitive edge across various platforms including Search and Google Worksuite, thereby expanding its AI capabilities and user experience.
From an investment perspective, Alphabet’s stock appears to be undervalued relative to the tech sector, with a price-to-earnings (P/E) ratio of 28, compared to the industry average of 41. This valuation enhances its attractiveness for investors seeking exposure to the AI boom.
Both Nvidia and Alphabet stand out as solid choices for investors looking to capitalize on the ongoing advancements in artificial intelligence, positioning themselves to benefit from the growing investment in this key technology area for years to come.
