There’s a lot of excitement around certain companies, and they’re giving investors a reason to feel hopeful about this sector’s future.
The surge in artificial intelligence (AI) has sparked some worries about a potential bubble. Are we heading toward a collapse similar to what happened to the dot-com boom at the turn of the century?
However, a study for The Motley Fool’s 2026 AI Investor Outlook Report reveals that 93% of investors holding AI stocks or ETFs aren’t too worried. They believe that companies in the AI space will provide solid returns over the long haul and view the sector’s growth as part of a lasting trend.
Two companies that stand out as likely to benefit from AI advancements in the future are Nvidia and Alphabet. Nvidia, as the leading name in semiconductors, and Alphabet, or Google, both seem set to flourish as AI technology transforms the landscape.
How Nvidia is Leveraging the AI Trend
Nvidia CEO Jensen Huang shared his optimistic perspective on AI during a recent earnings call. He acknowledged the buzz about an AI bubble but insisted, “We see something completely different.”
According to him, existing cloud computing frameworks predominantly built on CPUs lack the necessary upgrades to effectively handle AI tasks, which has led to increased demand for Nvidia’s hardware. Notably, in the third fiscal quarter of 2026, which concluded on October 26, Nvidia reported a remarkable 62% year-over-year revenue increase, hitting an all-time high of $57 billion.
Nvidia is not just resting on its laurels; it’s also pioneering new technologies like agent AI and autonomous vehicles, which Huang describes as potentially transformative for creating various new applications and services.
By collaborating with ride-hailing companies such as Uber, Nvidia is making strides toward launching self-driving cars by 2027, positioning itself well for the upcoming changes in transportation.
AI Benefits for Alphabet
While Nvidia focuses on providing the chips fueling AI, Alphabet is actively bringing these innovations to the broader public. Initially, the rise of generative AI seemed like a threat to Alphabet’s cash cow, Google Search. Still, the company has managed to hold onto its leadership in search through its distinctive AI initiatives.
“As users explore what our new AI tools can do, we’re seeing an uptick in search activity,” remarked Alphabet CEO Sundar Pichai during the company’s third-quarter earnings call.
This focus paid off, as Google Search generated $56.6 billion in revenue in the third quarter—up from $49.4 billion the previous year—while total revenues climbed 16% to reach $102.3 billion.
Alphabet is also making headway with its self-driving car division, Waymo, which is methodically growing its driverless ride-hailing services in the U.S., eyeballing expansions into London this year and Tokyo by 2025.
In summary, investing in both Alphabet and Nvidia seems a savvy approach to engage with the different facets of the AI sector, with both companies looking well-positioned for growth in the coming years.
