Nvidia currently holds the top spot as the world's largest company, but its major customers, Amazon and Alphabet, are increasingly becoming strong competitors in the artificial intelligence chip market. Both tech giants are heavily investing in their own AI infrastructure and chip development to reduce reliance on external providers like Nvidia.
Amazon Web Services (AWS) plans to spend $200 billion, primarily on its AI business, and is developing its own AI chips, Trainium and Inferentia, which directly compete with Nvidia's hardware. AWS also partners with Anthropic and reports that its AI services already generate $1 billion annually, despite its market share dropping to 28% amidst competition from Microsoft and Alphabet's Google.
Alphabet, Google's parent company, leverages its in-house Tensor Processing Units (TPUs) for AI development and research through its DeepMind lab. Google Cloud demonstrated strong performance with 48% revenue growth and a 30% operating margin in the last quarter, driven by AI demand. Its Gemini app now serves 750 million monthly users, and AI significantly aids its advertising customers.
While Wall Street analysts project a 37% increase in Nvidia's stock price over the next year, with an average target of $253.62 per share and some predicting $352, investors are also considering Amazon and Alphabet. These companies offer more diversified investment opportunities with lower price-to-earnings ratios compared to Nvidia's high valuation.
Oracle is also making significant moves in the AI cloud space, securing an $88 million cloud contract with the U.S. Air Force. The company plans to raise billions to build its AI-focused cloud infrastructure, including a massive $300 billion deal with OpenAI to construct data centers over five years. However, Oracle's stock has fallen 55% from its late 2025 peak due to concerns over these large AI investments and increasing debt, which includes an existing $100 billion and plans to raise another $45 billion to $50 billion.
In other market developments, Goldman Sachs introduced a new software stock basket, noting that software stocks now trade at 27 times earnings, down from 51 times a year ago, with expected earnings growth of 14.1% by 2026. Shopify reported $3.67 billion in Q4 2025 revenue and approved a new $2.00 billion share repurchase program, focusing on AI-powered commerce tools for future growth, projecting $18.5 billion in revenue by 2028. Additionally, Rizz Network Inc. secured a $5 million investment from Nimbus Capital to expand its Rizz Wireless, a US mobile network that uses blockchain and AI to reward customers.
Key Takeaways
- Amazon Web Services plans to invest $200 billion, primarily in its AI business, developing its own AI chips (Trainium, Inferentia) and partnering with Anthropic.
- Amazon's AI services currently generate $1 billion annually, despite AWS's market share dropping to 28% amid competition from Microsoft and Alphabet.
- Alphabet (Google) uses in-house Tensor Processing Units for AI, with Google Cloud achieving 48% revenue growth and a 30% operating margin, and its Gemini app reaching 750 million monthly users.
- Wall Street analysts project a 37% increase in Nvidia's stock price over the next year, with an average target of $253.62 per share, potentially reaching $352.
- Amazon and Alphabet offer more diversified AI investment opportunities with lower price-to-earnings ratios compared to Nvidia.
- Oracle secured an $88 million cloud contract with the U.S. Air Force and plans to build AI-focused cloud infrastructure, including a $300 billion deal with OpenAI over five years.
- Oracle's stock has fallen 55% from its late 2025 peak due to concerns over high AI investments and increasing debt, which includes an existing $100 billion and plans to raise another $45-50 billion.
- Goldman Sachs introduced a new software stock basket, noting software stocks now trade at 27 times earnings, down from 51 times a year ago.
- Shopify reported $3.67 billion in Q4 2025 revenue, approved a $2.00 billion share repurchase, and focuses on AI-powered commerce tools, projecting $18.5 billion revenue by 2028.
- Rizz Network Inc. received a $5 million investment from Nimbus Capital to expand its AI-powered Rizz Wireless mobile network.
Amazon and Alphabet Challenge Nvidia in AI Market
Nvidia is currently the world's largest company, but its major customers Amazon and Alphabet are becoming strong competitors in the AI chip market. Amazon Web Services is developing its own chips with Anthropic and plans to spend $200 billion on AI infrastructure. Alphabet, the parent company of Google, uses its in-house Tensor Processing Units for AI. Both Amazon and Alphabet show strong revenue growth in their AI-related businesses and offer more diversified investments with lower price-to-earnings ratios than Nvidia.
Amazon and Alphabet Offer Strong AI Investment Alternatives
Nvidia is the world's largest company, but it faces growing competition from its customers Amazon and Alphabet in the AI sector. Amazon Web Services is investing heavily in its own AI chips, working with Anthropic, and plans $200 billion in capital spending. Alphabet, which owns Google and Gemini, uses its in-house Tensor Processing Units for AI. Both Amazon and Alphabet show strong revenue growth in their AI-related businesses and have lower price-to-earnings ratios compared to Nvidia.
Investors Consider Amazon and Alphabet Over Nvidia for AI
Nvidia is currently the world's largest company, but it faces increasing competition from its major customers, Amazon and Alphabet. Amazon Web Services is developing its own AI chips with Anthropic and plans to spend $200 billion on AI infrastructure. Alphabet, the parent company of Google and Gemini, uses its own Tensor Processing Units for AI. Both Amazon and Alphabet show strong growth in their AI-related services and offer more diverse investment opportunities with lower price-to-earnings ratios than Nvidia.
Goldman Sachs Creates New Software Stock Basket for AI Era
Goldman Sachs traders introduced a new software stock basket designed to handle market changes. Faris Mourad from Goldman Sachs believes the long side of this basket will recover from the recent software stock decline. Investors worry that generative AI could harm traditional software businesses and reduce profits. Software stocks now trade at 27 times earnings, down from 51 times a year ago. Experts expect software and services earnings to grow by 14.1% in 2026.
Alphabet Stands Out as a Top AI Stock for the Next Decade
Alphabet offers a complete investment opportunity in artificial intelligence for the next ten years. Its DeepMind lab researches AI, and the company develops its own Tensor Processing Units. Google Cloud saw strong revenue growth of 48% and a 30% operating margin in the last quarter due to AI demand. Alphabet's Gemini app has 750 million monthly users, and AI helps its advertising customers. With a reasonable price-to-earnings ratio, Alphabet is a strong AI investment.
Oracle Balances Air Force Cloud Deal with AI Lawsuits
Oracle recently secured an $88 million cloud contract with the U.S. Air Force, strengthening its government cloud business. The company is also raising billions of dollars to build its AI-focused cloud infrastructure. However, Oracle faces lawsuits claiming it misled investors about its AI plans and spending. Oracle aims to become a leading provider of AI computing infrastructure while managing these legal challenges.
Wall Street Analysts See Strong Growth for Nvidia Stock
Wall Street analysts believe Nvidia is a top artificial intelligence stock to buy in February 2026. They project a 37% increase in Nvidia's stock price over the next year, with an average target of $253.62 per share. Some analysts even predict it could reach $352. Nvidia has performed very well recently because of its strong position in the AI market. Many large AI companies are planning significant spending for AI in 2026, which supports Nvidia's growth.
Rizz Network Secures 5 Million Dollar Investment for AI Wireless Growth
Rizz Network Inc. received a $5 million investment from Nimbus Capital to boost its RZTO ecosystem and Rizz Wireless expansion. Rizz Wireless is a US mobile network that rewards customers using blockchain, AI, and decentralized infrastructure. The RZTO token, built on Solana, uses AI to manage rewards for mobile usage. Founders Ganpatsingh Rajput and Harveer Singh designed RZTO for real-world utility. This investment will help Rizz Wireless grow its AI-powered reward programs and merchant partnerships.
Shopify Reports Strong Revenue and New 2 Billion Dollar Buyback
Shopify announced its fourth quarter 2025 results, showing $3.67 billion in revenue and $11.56 billion for the full year. The company expects revenue growth in the low-thirties percentage range for the first quarter of 2026. Shopify also approved a new $2.00 billion share repurchase program. The company is focusing on AI-powered commerce tools like the Universal Commerce Protocol to drive future growth. Shopify projects its revenue to reach $18.5 billion and earnings to hit $2.7 billion by 2028.
Oracle Stock Drops 55 Percent Amid High AI Spending and Debt
Oracle's stock has fallen 55% from its peak in late 2025, as investors worry about its large AI investments and increasing debt. The company made a $300 billion deal with OpenAI to build data centers over five years. Oracle plans to raise another $45 billion to $50 billion to fund these projects, adding to its existing $100 billion debt. This makes Oracle a high-risk, high-reward AI investment, especially as OpenAI's ChatGPT faces declining market share.
Amazon Boosts AI Spending to Compete in Cloud Market
Amazon plans to invest $200 billion in 2026, mainly for its Amazon Web Services AI business. This large investment comes as AWS's market share has dropped to 28%, facing strong competition from Microsoft and Alphabet's Google. Despite this, AWS revenue increased by nearly 24% last quarter. Amazon is developing its own AI chips, Trainium and Inferentia, which compete with Nvidia's hardware. CEO Andy Jassy reported that Amazon's AI services already generate $1 billion annually, positioning the company for growth in the expanding AI data center market.
Sources
- Should You Forget Nvidia and Buy 2 Other Artificial Intelligence (AI) Stocks Instead?
- Should You Forget Nvidia and Buy 2 Other Artificial Intelligence (AI) Stocks Instead?
- Should You Forget Nvidia and Buy 2 Other Artificial Intelligence (AI) Stocks Instead?
- Goldman Traders Launch AI-Proof Software Basket Amid Sector Rout
- What Is 1 of the Best AI Stocks to Own for the Next 10 Years?
- Oracle Weighs Air Force Cloud Win Against AI Spending Lawsuits
- This Is the Best AI Stock to Buy in February 2026, According to Wall Street
- Rizz Network Inc. Announces Strategic $5M Capital Commitment From Nimbus Capital for $RZTO, Powering the Next Phase of AI-Enabled, DePIN-Driven Rizz Wireless Expansion
- How Investors Are Reacting To Shopify (SHOP) Q4 Results, AI Push And New US$2 Billion Buyback
- Down 55%, Is Oracle Stock a Buy in 2026?
- The Catch-22 Behind Amazon's Big AI Spending Plans
Comments
Please log in to post a comment.