Two Excellent AI Investment Opportunities in 2026: A Deep Dive into Nvidia and Alphabet

The artificial intelligence revolution has moved beyond hype into fundamental business transformation. Unlike fleeting market trends, AI represents a foundational technological shift that is reshaping how companies operate, compete, and create value. For long-term investors seeking excellent positions in this shift, two standout companies demonstrate the rare combination of market dominance, expanding opportunities, and sustainable competitive advantages.

Nvidia’s Dominant Market Position Fuels Strong Growth

Nvidia has established itself as the backbone of the AI infrastructure boom. In the third quarter of 2025, the company’s revenue surged 62% year-over-year, reflecting insatiable demand from major technology companies deploying AI systems at scale. These same enterprises have committed to significantly higher spending on AI infrastructure through 2026, ensuring continued momentum for Nvidia’s business.

What distinguishes Nvidia from potential competitors is more than just current demand—it’s structural advantage. The company maintains net profit margins exceeding 55%, a remarkable figure that reveals the strength of its pricing power and operational efficiency. This margin profile indicates that Nvidia retains a substantial portion of revenue as profit, enabling reinvestment in research and development while rewarding shareholders.

The core driver of this dominance lies in Nvidia’s graphics processing units (GPUs) and proprietary software ecosystem. No competitor has yet matched the technological capabilities embedded in these systems, creating a moat around the company’s market position. While investors should not expect another 1,200% surge like the past five years, the fundamentals suggest continued outperformance relative to broader market indices.

Alphabet’s Diversified AI Strategy Across Multiple Platforms

Alphabet has taken a different approach by deploying AI across multiple revenue streams simultaneously. The company’s search business benefits from enhanced relevance and targeted advertising powered by AI algorithms, driving revenue growth in the advertising segment that remains critical to long-term profitability.

However, search represents only a portion of Alphabet’s AI opportunity. Google Gemini, the company’s subscription-based AI model, has attracted 650 million monthly active users—a user base that hints at emerging revenue potential. More transformative is Waymo, the autonomous vehicle division pursuing a $100 billion valuation as it expands to additional cities. While Waymo currently generates minimal revenue, its potential to revolutionize transportation represents an extraordinary growth runway.

Google Cloud provides the most immediate financial impact. Serving as the digital infrastructure for enterprise AI applications, Google Cloud generated $15.2 billion in revenue during Q3 2025, representing 34% year-over-year growth. This business segment functions as a platform enabling other companies to build AI applications while capturing data storage and analytics revenue. As enterprises increasingly rely on cloud infrastructure for AI deployments, Google Cloud’s share of total company revenue should expand.

Alphabet’s strategy demonstrates how a technology leader can pursue multiple pathways simultaneously—using proprietary AI capabilities while monetizing infrastructure that others build upon. This diversified approach provides multiple ways to win in the AI era.

Why These Remain Excellent Long-Term Positions

Both companies exhibit characteristics associated with excellent investment positions: durable competitive advantages that competitors struggle to match, expanding markets that remain in early growth phases, and extended runways for continued expansion. Nvidia controls the chips powering AI infrastructure, while Alphabet operates across multiple layers of the AI ecosystem.

The historical record suggests that timing matters less than position quality when investing in transformational technologies. Companies with strong competitive advantages and multiple growth pathways have consistently delivered exceptional returns to patient investors. As the AI revolution continues reshaping industries throughout 2026 and beyond, these two companies maintain the characteristics that identify excellent opportunities for those with a long-term perspective.