Of all the "Magnificent Seven" stocks, none have even come close to the gains that Nvidia has posted. The chipmaker's shares have skyrocketed 221% in just the last 12 months (as of Feb. 6). There has perhaps been no bigger beneficiary of the artificial intelligence (AI) boom.

It's understandable if you're worried that you missed the boat on Nvidia. But there's still a reason to remain optimistic. Take a closer look at Alphabet (GOOG 9.96%) (GOOGL 10.22%), which just might be the best AI stock to buy and hold.

Nvidia's rise is justified

Providing the chips that power AI use cases has been a thriving business, propelling Nvidia's growth. The company's fiscal 2024 third-quarter sales of $18.1 billion were more than triple the year-ago period, demonstrating the strong demand the company is experiencing. Plus, the business is posting a surge in profits.

With the global AI market expected to expand nearly ninefold over the next seven years, Nvidia is staring at a massive opportunity to keep the growth going. This has supported investors' extreme bullishness about Nvidia being a smart AI infrastructure play.

But because of this stock's meteoric rise, things look to be on the expensive side of things right now. Shares trade at a price-to-earnings ratio of 89.7. That's still a steep price to pay for prospective investors, regardless of the growth potential.

Alphabet isn't new to AI

In the fourth quarter of 2023, Alphabet reported digital advertising revenue of $65.5 billion, which was up 11% year over year. But this figure disappointed Wall Street, sending shares lower after the announcement. And the stock now trades at a P/E multiple of 24.9. This is a good entry point for investors to own a leader in AI.

CEO Sundar Pichai said more than seven years ago that Alphabet would be "AI-first." This was long before the introduction of ChatGPT in late 2022, which set off a race among tech companies to launch AI products and services.

"The last 10 years have been about building a world that is mobile-first, turning our phones into remote controls for our lives," he wrote in a blog post in October 2016. "But in the next 10 years, we will shift to a world that is AI-first, a world where computing becomes universally available -- be it at home, at work, in the car, or on the go -- and interacting with all of these surfaces becomes much more natural and intuitive, and above all, more intelligent."

To be fair, Alphabet has already integrated AI into its various services. In fact, the business started developing machine learning capabilities as far back as 2001 in Google Search that helped users improve spelling when searching. Nowadays, AI is used in Maps to provide traffic info, to better organize and search in Photos, and in the various tools Google Cloud offers. These are just a few examples.

Looking ahead, there are a lot more robust AI features in the pipeline. When it comes to the cloud segment, the recent introduction of Gemini, a generative AI platform, can help clients build and launch their own apps for their own customers.

What places Alphabet in a very advantageous position is that it already has a gargantuan user base that it can test new features on, collect data from, and iterate and improve in a continuous cycle. Six of the company's products and services have more than 2 billion users.

It also helps that Alphabet is incredibly profitable, generating $102 billion of operating cash flow in 2023, and currently sitting on a net cash balance of $98 billion. This gives it the financial resources to keep plowing capital into research and development initiatives. There are few businesses that can compete with Alphabet when it comes to making sizable investments. In this case, this strategy will only fortify the company's already strong competitive position.

So while most investors out there remain mesmerized by a business like Nvidia, sometimes the best way to gain exposure to a revolutionary technological trend is through a company that gets taken for granted. And that looks to be Alphabet. That makes it my best AI stock to buy and hold over the long term.