Prediction: 2 Artificial Intelligence Stocks That Will Be Worth More Than Nvidia by the End of 2026 | The Motley Fool

Is 2026 the year Nvidia finally underperforms versus the broad market? I think it might be. The leader in artificial intelligence ( AI ) computer chips is unlikely to give up all its gains from the last few years, but it is facing increasing competition, a high starting valuation, and the potential of near-term overspending to build out AI infrastructure. That makes the stock risky for 2026. That doesn't mean you should dump your entire position. However, if you are thinking of buying AI stocks in 2026, there are two companies I believe will finish the year with larger market caps than Nvidia: Amazon ( AMZN +0.47%) and Alphabet ( GOOG +0.88%). Here's why both are better buys than Nvidia today. NASDAQ: AMZN Key Data Points Alphabet's AI comeback Alphabet is the conglomerate that owns Google, YouTube, Android, Waymo, and other technology properties. It is one of the largest and most profitable companies in the world, with billions of users across multiple product lines. Image source: Getty Images. The stock was deemed a potential AI loser after ChatGPT came out and rapidly began taking market share of search and AI queries, with Alphabet falling flat-footed after the launch. Now, with the launch of updated Gemini AI models for text, images, and video creation (among other things), Alphabet is steadily gaining market share back from OpenAI and ChatGPT. Its stock has begun to perform because of it. Alphabet stock is up 60% year to date (YTD), which is more than double the returns of Nvidia. It is growing revenue at 15% year over year in constant currency, and with expanding profit margins. The durability of Google Search and YouTube, fast growth at Google Cloud, and long-term plays with Gemini and Waymo's self-driving cars should help Alphabet keep compounding its earnings power for years to come. Amazon's dual engines Alphabet's growth path in 2026 is clear. Amazon's will be determined by management's ability to wrangle costs that spiraled out of control during the pandemic years, which is a headwind still impacting the business. Amazon's cloud computing division -- Amazon Web Services (AWS) -- grew revenue 20% year over year last quarter, with a fat 36% operating margin over the last 12 months. Cloud computing is benefiting from the AI infrastructure expansion, with Amazon specifically helped by the likes of its partner Anthropic, a start-up growing incredibly quickly that Amazon is also an investor in. OpenAI is in talks with Amazon about a $10 billion investment that would likely flow back through to AWS cloud computing spending. You have a 36% operating margin at AWS. In retail, Amazon is still growing strongly, with double-digit growth in the last few years in North America and internationally. Advertising, third-party seller services, and subscription revenue now generate $279 billion in trailing revenue, or 40% of Amazon's total revenue. These segments have high profit margins and have been growing faster than the overall Amazon retail business. And yet Amazon's retail operations in North America only have a...

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