Better Artificial Intelligence Stock: AMD vs. Alphabet

By Robert Izquierdo – Feb 10, 2026 at 2:50PM ESTKey PointsAMD and Alphabet produced strong performance in 2025, including record revenue growth.Wall Street did not like aspects of their latest earnings reports, leading to share price drops.AMD and Alphabet now sport similar share price valuations, as evidenced by their forward P/E ratios.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: AMDAdvanced Micro DevicesMarket Cap$352BToday's Changeangle-down(-1.03%) $2.23Current Price$213.76Price as of February 10, 2026 at 3:42 PM ETAI is delivering impressive business results for these two giants.Artificial intelligence remains a hot investment area in 2026, but it's also a volatile sector. For example, Wall Street was disappointed in the latest earnings reports from Advanced Micro Devices (AMD 1.03%) and Alphabet (GOOGL 1.49%)(GOOG 1.36%), contributing to a share price drop for both. This volatility creates opportunities for the astute long-term investor. Now is the time to scoop up shares in AMD and Alphabet. After all, one earnings report does not define how these companies will perform over the long run. But is one a better long-term investment in AI? To answer that question, let's dive into where they stand currently. Image source: Getty Images. A look into AMD AMD wrapped up 2025 on a strong note. Revenue in its fiscal fourth quarter, ended Dec. 27, was a record $10.3 billion. Each of its divisions, from data centers to gaming, experienced year-over-year Q4 sales growth. AMD's excellent results were thanks to the fast-growing artificial intelligence market. Customers are rushing to buy the company's products to build the computing power needed for AI. This demand is expected to continue. AMD forecasted fiscal Q1 revenue of about $9.8 billion, representing 32% growth from the prior year's $7.4 billion, which was record first quarter revenue at the time. That prediction was not enough for Wall Street's sky-high expectations, leading to AMD's share price drop. ExpandNASDAQ: AMDAdvanced Micro DevicesToday's Change(-1.03%) $-2.23Current Price$213.76Key Data PointsMarket Cap$352BDay's Range$213.50 - $219.3752wk Range$76.48 - $267.08Volume774KAvg Vol40MGross Margin45.99% How Alphabet is faring Alphabet also delivered a strong performance. Its Q4 sales soared 18% year over year to $113.8 billion. This enabled Alphabet's 2025 revenue to exceed $400 billion for the first time. Its ubiquitous Google search engine was a key contributor here as the division's Q4 sales reached $63.1 billion, up from 2024's $54 billion. Google's search income is rising because of AI. According to Alphabet CEO Sundar Pichai, "Search saw more usage in Q4 than ever before as AI continues to drive an expansionary moment." Its outstanding results didn't save the stock from dropping due to the company's massive increase in capital expenditures. In Q4, capex skyrocketed 95% year over year to $27.9 billion, which resulted in Alphabet ending 2025 with over $91 billion in capex costs. But what spooked Wall Street was the tech titan's plan to spend more in 2026, with capex estimated between $175 billion and $185 billion. Alphabet sees this expenditure as essential to evolving its AI tech. ExpandNASDAQ: GOOGLAlphabetToday's Change(-1.49%) $-4.82Current Price$319.50Key Data PointsMarket Cap$3.9TDay's Range$314.62 - $321.6152wk Range$140.53 - $349.00Volume1.4MAvg Vol37MGross Margin59.68%Dividend Yield0.26% Deciding between AMD and Alphabet AMD's share price valuation was elevated before its fiscal Q4 earnings release, as illustrated by its forward price-to-earnings (P/E) ratio. But after its stock price drop, as the chart shows, its forward P/E multiple is now on par with Alphabet's. Data by YCharts. Consequently, is AMD the stock to buy? Actually, a few factors give Alphabet the edge. For income-oriented investors, Alphabet offers a modest dividend yielding 0.25%. AMD does not pay a dividend. In addition, Alphabet remains the global leader in search with a 91% market share. As Pichai noted, Google usage is climbing thanks to AI, solidifying its market dominance. Alphabet's capex spending may have scared Wall Street, but as its Q4 results demonstrate, the AI investments are driving results. These factors mean the superior AI stock is Alphabet.Read NextFeb 10, 2026 •By Will HealyPrediction: This Artificial Intelligence (AI) Stock Will Recover Faster Than ExpectedFeb 9, 2026 •By David Jagielski, CPAAMD's Growth Rate is Declining.

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Is It Time to Buy the Stock on the Dip?Feb 7, 2026 •By Timothy GreenThe Hidden Driver Behind AMD's Most Bullish 2026 GuidanceAbout the AuthorRobert "Izzy" Izquierdo is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and communication services sectors. Prior to The Motley Fool, Izzy was head of product management at Target Media Partners, developing and launching multimillion-dollar software used by businesses such as Charter Communications. Prior to that, he worked at Yahoo! and startups on software products in connected TV, AI, consumer apps, and digital advertising. He holds a bachelor’s degree in English literature from UCLA and is certified in software product management.TMFWryWriteStocks MentionedAdvanced Micro DevicesNASDAQ: AMD$213.76 (1.03%) $2.23AlphabetNASDAQ: GOOGL$319.50 (1.49%) $4.82AlphabetNASDAQ: GOOG$319.98 (1.36%) $4.42*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.