Over the past decade, Nvidia (NVDA -1.11%) stock has soared by proportions that may have seemed unimaginable. The stock has advanced a mind-boggling 29,000%. That happened as the company got in on the artificial intelligence (AI) story in its earliest days, allowing it to tailor its chips to suit AI needs and take considerable market share.

It's likely that Nvidia, as the leading AI chip designer, will continue to gain in the next chapters of the AI boom -- but it may not be the biggest growth story. Instead, this underrated AI infrastructure player could outperform Nvidia over the next decade.

An image of a cloud with AI written in it, shown in a data center.

Image source: Getty Images.

An Nvidia customer

This company, like its AI infrastructure rivals, is a customer of Nvidia, offering the chip designer's top performing graphics processing units (GPUs) as part of its selection of AI offerings. I'm talking about Alphabet (GOOG 2.09%) (GOOGL 2.12%), a company you might more easily associate with Internet search thanks to its Google Search business than with AI -- that's why I consider it an "underrated" AI stock.

Year after year, Google Search has maintained more than 90% market share, and you may rely on the Google platform daily as soon as you sit down at your computer or turn on your phone. So, it's no surprise that Google, through advertising across the platform, generates most of the company's revenue -- in the latest quarter, Google advertising brought in $71 billion, which represents more than 70% of total sales.

And this business is likely to continue growing as Alphabet uses AI to improve search results as well as the effectiveness of advertisers' ads. This should keep both search users and advertisers loyal -- and may even lead to increases in ad spending.

But where Alphabet may see tremendous growth in the coming years is in its Google Cloud business, an area where its AI strengths can shine. The company has already developed its own large language model (LLM), Gemini, which not only is powering the AI used in the search business, but also is a key tool offered to customers of the cloud unit.

Google images are shown in a notebook.

Image source: Alphabet.

A variety of AI products and services

In fact, Google Cloud not only features Gemini, but also a variety of other AI products and services needed by customers. And right now, we're entering a key phase of the AI revolution -- the quest for AI capacity. Customers are rushing to infrastructure companies so that they can run their AI workloads, and companies like Alphabet are seeing this reflected in their revenue growth.

In the latest quarter, Google Cloud revenue increased 32% to more than $13 billion thanks to demand for AI infrastructure and generative AI solutions. The company said deals worth more than $250 million doubled year over year, and in the first half, Google Cloud signed the same number of deals worth more than $1 billion as it did in all of last year.

And this follows quarter after quarter of growth in the business, with revenue and operating income reaching milestones -- such as $10 billion and $1 billion, respectively, in the second quarter of last year.

Jensen Huang's prediction

Nvidia CEO Jensen Huang predicts that AI infrastructure spending may reach as much as $4 trillion by the end of this decade, which sets the stage for a growing infrastructure company like Alphabet to excel.

On top of this, an element that's weighed on Alphabet stock has recently lifted. In a U.S. antitrust case against the company, the worst-case scenario didn't unfold: A judge ruled that Alphabet wouldn't be required to dismantle its Google business. With this risk behind it, Alphabet now may attract certain cautious stock investors that were waiting for the outcome of that case.

Now, we know that Nvidia and Alphabet both are well positioned to benefit from AI growth in the years to come -- why could Alphabet actually outperform? Today, Alphabet stock is considerably cheaper than Nvidia -- at 24x forward earnings estimates versus 41x. Alphabet's price offers investors a bargain entry point and suggests this player has plenty of room to run, especially considering the need for AI infrastructure in the years to come.

All this means Alphabet may have what it takes to outperform market giant Nvidia over the next decade.