In 2025, AMD and Alphabet saw record revenue growth, but Wall Street reacted negatively to their latest earnings reports, causing share price drops. Both companies now have similar share price valuations based on their forward P/E ratios, presenting opportunities for long-term investors interested in the artificial intelligence sector.

AMD ended 2025 with record revenue of $10.3 billion, driven by strong demand in the artificial intelligence market. Despite forecasting 32% revenue growth for fiscal Q1, AMD’s share price dropped due to high market expectations.

Alphabet also performed well in 2025, with Q4 sales reaching $113.8 billion and exceeding $400 billion for the year. The company’s increased capital expenditures, mainly for AI technology, led to a drop in its stock price, but Alphabet remains a dominant player in the search market.

Investors deciding between AMD and Alphabet should consider Alphabet’s edge in the AI sector, as well as its dividend yield and market dominance in search. Despite concerns about high capex spending, Alphabet’s AI investments are driving results, making it the superior AI stock choice over AMD.

Before buying stock in Advanced Micro Devices, investors should note that it was not among the top 10 stocks recommended by Motley Fool Stock Advisor analysts. The top 10 stocks identified have historically produced significant returns, outperforming the S&P 500 by a wide margin. Consider joining Stock Advisor for access to their latest recommendations and investing community.

Read more at Nasdaq: Better Artificial Intelligence Stock: AMD vs. Alphabet