Which AI Chip Stock Is the Better Buy for 2026: Nvidia or Alphabet?

By Justin Pope – Dec 18, 2025 at 4:45PM ESTKey PointsNvidia continues to grow rapidly, thanks to its leadership in artificial intelligence (AI) data center chips.Alphabet has a full AI stack, and could now add its TPU chips to the equation.Both look like long-term winners, though the better buy could depend on the investor.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: NVDANvidiaMarket Cap$4.2TToday's Changeangle-down(1.87%) $3.20Current Price$174.14Price as of December 18, 2025 at 4:00 PM ETSome believe Alphabet's success with its TPU chips could make it a challenger to Nvidia's data center dominance.The stock market is witnessing a technological arms race playing out in real time. Companies are racing to build the data centers and other infrastructure to support artificial intelligence (AI), which experts believe could create trillions of dollars in economic value over the coming decades. Inside these data centers are massive clusters of chips, which work together to train and operate AI models. The AI chip conversation begins with Nvidia (NVDA +1.87%), the company that has dominated this market from the jump. However, tech giant Alphabet (GOOGL +1.88%)(GOOG +1.91%) has emerged as a potential competitor after successfully training its AI models with custom-built TPU chips it designed in-house. Which AI chip stock is the better buy heading into 2026? Image source: Nvidia. Nvidia's AI dominance creates a high ceiling, but a lower floor Thus far, developing AI has required massive quantities of chips. Nvidia's leadership in the AI chip market has translated to explosive revenue and profit growth for the company since early 2023. Some experts believe Nvidia's market share in the data center GPU chip space is as high as 92%.Advertisement As long as hyperscalers continue to build out this infrastructure, it's hard to see Nvidia's business slowing down anytime soon. In fact, Nvidia announced that it has booked $500 billion in orders for its Blackwell chips and their looming successor, Rubin, through the end of next year, with $150 billion of that already delivered. ExpandNASDAQ: NVDANvidiaToday's Change(1.87%) $3.20Current Price$174.14Key Data PointsMarket Cap$4.2TDay's Range$171.82 - $176.1552wk Range$86.62 - $212.19Volume176MAvg Vol192MGross Margin70.05%Dividend Yield0.02% This data center boom has been highly lucrative. Nvidia now has deep pockets to develop and prepare for emerging AI opportunities outside of data centers, such as autonomous vehicles and humanoid robotics. That said, data center chip sales have become nearly the entirety of Nvidia's business. If data center investments dry up, Nvidia would struggle to fill those holes, and the stock would likely collapse. Alphabet's AI ecosystem makes it the safer bet For as much money pouring into AI data centers as there is, the group of companies cutting the checks, the AI hyperscalers, is relatively small. Among them is Google's parent company, Alphabet. Rather than relying on Nvidia's chips to power its AI models, Alphabet has worked diligently to develop its own custom-built tensor processing units, or TPUs, designed specifically for Google Cloud's machine learning workloads. Alphabet successfully trained its newest Gemini model on its TPUs. It went so well that the company is considering selling its TPUs to other AI hyperscalers, such as Meta Platforms. Alphabet probably won't challenge Nvidia's market leadership, but the TPU represents additional upside to Alphabet's complete AI ecosystem. It's icing on an already delicious cake. ExpandNASDAQ: GOOGLAlphabetToday's Change(1.88%) $5.57Current Price$302.29Key Data PointsMarket Cap$3.6TDay's Range$299.24 - $303.9452wk Range$140.53 - $328.83Volume1.3MAvg Vol36MGross Margin59.18%Dividend Yield0.28% The stock already has a high floor due to its lucrative advertising and cloud computing business segments. Even if Alphabet never sells its TPUs to another company, they still provide a crucial cost benefit, saving Alphabet from spending billions of dollars on third-party chips. At this point, it appears that Alphabet has a significantly higher floor than Nvidia. The winner? It depends Does that make Alphabet the better buy? Well, it sort of depends on the style of investor you are. If you want maximum upside, it's hard to beat Nvidia, which has proven to possess the foresight needed to dominate the AI opportunity from the beginning. Even if other companies begin encroaching on the data center market, Nvidia will likely remain a key player in the AI field, including future applications. However, if you're looking for a business that is a bit more diversified and stable, Alphabet may be a better fit for you. The company has multiple established business units and still offers exposure to new industries, like autonomous driving and quantum computing, through its smaller divisions. The good news? Both stocks trade at attractive valuations, based on the market's expectations for their future earnings growth. NVDA PE Ratio data by YCharts A higher anticipated growth rate accompanies Nvidia's higher price-to-earnings ratio, though things can change quickly if the AI investment cycle ends prematurely. Ultimately, it's hard to go wrong with either company as a buy-and-hold AI investment for 2026 and beyond.Read NextDec 18, 2025 •By Harsh ChauhanThe Best Stocks to Invest $1,000 in Right NowDec 18, 2025 •By Chris NeigerNvidia Earns 69% of Its Revenue From the U.S. Here's How Tariffs Could Affect That in 2026.Dec 18, 2025 •By Manali Pradhan, CFAGot $1,000? 3 Tech Stocks to Buy and Hold for DecadesDec 18, 2025 •By Parkev Tatevosian, CFARanking The Best "Magnificent Seven" Stocks to Buy for 2026Dec 18, 2025 •By Jose Najarro2 AI Announcements That Nvidia Investors Can't MissDec 18, 2025 •By Jose NajarroThese Recent AI Updates Are Long-Term Tailwinds for AI Infrastructure StocksAbout the AuthorJustin Pope is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and industrials. Prior to The Motley Fool, Justin was a business manager for an industrial company.TMFbeardedFiStocks MentionedNvidiaNASDAQ: NVDA$174.21 (+0.02%) $+3.27AlphabetNASDAQ: GOOGL$302.29 (+0.02%) $+5.57AlphabetNASDAQ: GOOG$303.75 (+0.02%) $+5.69*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.Advertisement