From Nasdaq:

Semiconductor stocks, particularly Nvidia, have been booming since the launch of ChatGPT, as the demand for cutting-edge graphics processing units has surged for accelerated applications.

Investors are wary that Nvidia’s share price may be overheated, as it has grown by 222% in the last 12 months and its valuation is about 97 times trailing earnings. The semiconductor industry is cyclical and will eventually see a downturn, with potential heavy losses for investors.

Alphabet, parent company of Google, is a major player in the AI revolution and provides a significantly less risky investment option compared to Nvidia. Google’s AI prowess is evidenced by its 91.5% share of the global search market, among other achievements.

Alphabet’s cloud offering, Gemini, has positioned it well for the AI industry’s next phase, making it a reliable pick for investors. In addition to accelerating cloud sales, the company’s global domination in search and location data further contributes to its strong growth potential.

Although the majority of Alphabet’s revenue and profit still come from Google Services, strong growth in its cloud business and competitive advantages make it undervalued. The stock can be bought for just 21 times forward earnings expectations, providing an opportunity for long-term growth.

Investing in Alphabet provides an excellent chance for long-term growth, especially with its reliable earnings from advertising and cloud services. The prospect of becoming a top performer in the AI space makes Alphabet a smart buy for long-term investors.



Read more: Missed Out on Nvidia? 1 Artificial Intelligence (AI) Growth Stock to Buy Now and Hold for a Decade or Longer