Nvidia (NVDA 1.53%) is at the center of the artificial intelligence (AI) boom and became the first publicly traded corporation to reach a $5 trillion market cap as a result. The AI chipmaker's earnings reports demonstrate that its semiconductors are still in strong demand. Record revenue of $57 billion, up by 62% year over year, shows that the company is still hot.
Although Nvidia has been a winning pick for years, investors may generate higher returns if they look at other AI stocks. These companies have smaller market caps and attractive growth opportunities that could help them outperform Nvidia in the years ahead.
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1. Alphabet addresses cloud, software, and physical AI
Nvidia provides the chips, and Alphabet (GOOG 1.69%) (GOOGL 1.66%) shows how companies can use semiconductors to create new products and accelerate growth for existing business segments.
NASDAQ: GOOGL
Key Data Points
Some investors worried that Google would lose its search engine dominance to AI models like ChatGPT and Grok, but earnings results have put those fears to rest. Alphabet delivered 18% year-over-year revenue growth in Q4 2025, with Google Services up by 14% year over year. Google Services include Google Search, subscriptions, and YouTube.
Those results confirm that Alphabet is using AI to boost its search engine revenue, and it further validates Google as the center of the internet. However, the big excitement for Alphabet stock isn't around search. The fact that the segment is still delivering strong results is a nice bonus.
Google Cloud and physical AI serve as Alphabet's two most significant catalysts. The Google Cloud platform powers many AI apps and has seen soaring demand thanks to AI. Revenue from the cloud computing segment was up by 48% year over year, with enterprise AI infrastructure playing a key role.
Cloud revenue now makes up more than 10% of Alphabet's business. Physical AI doesn't contribute to Alphabet's revenue quite like that, but long-term applications are another major catalyst, such as Waymo.
Waymo is Alphabet's fleet of self-driving vehicles that are already operating in a number of U.S. cities. These vehicles are competing with taxis and ride-hailing service providers. Uber's (UBER 2.83%) $150 billion market cap highlights Waymo's potential. Alphabet didn't provide much information about Waymo in its earnings report, but if it becomes a large segment like Google Cloud, the company's revenue acceleration may just be getting started.
2. Micron is an undervalued solution to the AI memory storage bottleneck
AI chips have been the talk in this rapidly growing industry, but all of those chips need memory storage devices to function properly. Without memory storage, the AI chips can't handle intense workloads. It's fundamental for AI infrastructure, and Micron (MU 3.19%) is one of the leaders in memory storage solutions.
NASDAQ: MU
Key Data Points
Micron stock has roughly quadrupled during the past year, and it has already posted a 30% year-to-date gain. Those gains come amid Micron's strong financial performance in its 2026 fiscal first quarter (ended Nov. 27) and optimistic projections.
During the quarter, Micron delivered 57% year-over-year revenue growth and almost tripled its net income. Rising revenue and profit margins are the hallmarks of a growth stock that outperforms the S&P 500, and Micron's involvement in AI makes it a strong contender for exceeding Nvidia's returns.
Micron has already outperformed Nvidia during the past year, and it comes with a forward price-to-earnings (P/E) ratio of only about 12. That low valuation is extremely hard to find among high-growth AI stocks. Nvidia's forward P/E ratio is almost twice as high despite Micron delivering higher net profit growth rates.
Revenue should continue to accelerate as Micron shifts away from the consumer business to focus on AI infrastructure. The shift should translate into higher growth rates and more attractive margins. Micron's first-quarter results are a testament to the company's pivot to AI, and growth is set to gain momentum in the coming quarters. Micron suggested substantial growth across revenue, margins, and free cash flow in its Q2 outlook. This growth implies that Micron could continue to outperform Nvidia in the years ahead.
