Better Artificial Intelligence (AI) Stock: Alphabet vs. Nvidia

Robert Izquierdo, The Motley Fool

Thu, Apr 17, 2025, 8:00 AM 5 min read

Tech giants Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Nvidia (NASDAQ: NVDA) are among the businesses at the forefront of artificial intelligence (AI), making them compelling AI investments. Each offers a different aspect of the AI ecosystem to invest in.

Nvidia is a leader in the semiconductor hardware AI needs to operate on cloud computing infrastructure, such as Alphabet's Google Cloud platform. Alphabet's software products deliver AI's benefits to consumers. For example, its Google search engine shows AI-generated responses to many search queries.

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Given that Alphabet and Nvidia operate in different areas of the AI sector, is one a better AI investment over the other? Getting to an answer requires digging into each tech titan in more depth.

Like many of its tech peers, Alphabet is investing heavily into AI. It poured $52.5 billion into capital expenditures (capex) last year, and expects to up that to $75 billion in 2025.

These costs are a necessity. Alphabet's AI must win over consumers because people are starting to shift away from search engines, such as Google, in favor of AI tools. Research firm Gartner predicts search engine usage will drop by a whopping 25% in 2026 as people adopt AI apps instead, such as OpenAI's ChatGPT.

Google accounted for a massive $198.1 billion of Alphabet's $350 billion in 2025 revenue. So Alphabet needs AI users to embrace its artificial intelligence solutions to keep Google revenue from falling.

So far, Alphabet's AI products are succeeding. Its Google Cloud customers are using the platform to build AI for their businesses, and usage has surged eightfold over the past 18 months. This contributed to Google Cloud revenue rising to $43.2 billion in 2024, up from 2023's $33.1 billion.

Alphabet is also working on quantum computers, tech that could supercharge AI. In December, the conglomerate announced Willow, a quantum chip capable of completing calculations in minutes that would take today's supercomputers centuries to complete. Willow is still experimental, but if Alphabet can bring the chip into broad use eventually, this could be a game changer.

Nvidia's outsize success amid the AI boom understandably captured headlines. The firm enjoyed jaw-dropping 114% sales growth to $130.5 billion in its 2025 fiscal year, ended Jan. 26. That success was driven by tech companies, such as Alphabet, buying Nvidia products to build AI capabilities in their cloud data centers.