Cloud computing has become ground zero for artificial intelligence (AI) development. The large cloud infrastructure companies provide platforms where developers can create their AI apps, which is where the magic happens. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Oracle (NYSE: ORCL) are the third- and fourth-largest cloud infrastructure companies globally, according to Statista, accounting for 14% and 4% of the market, respectively.
They're both enjoying high growth in AI and are well-positioned for the future. But which is the better AI stock to buy now and hold for the next five years? This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Alphabet is a leader in artificial intelligence thanks to its widely used large language model (LLM), Gemini.
It has an edge in its Google Search-native integration as well as its Android and Chrome integrations, bringing it straight to where users already are. Gemini use continues to increase, and Google has been rapidly releasing new features and upgrades that offer greater value. Some second-quarter highlights included the launch of Gemini 3.6 Flash, which offers better cost efficiency for budget customers, and the rollout of the AI video generator Omni.
Since Omni's debut in May, there has been a 40% increase in the number of daily active users creating videos on Gemini. Strong AI-driven engagement led to an 82% year-over-year increase in Google Cloud revenue in the second quarter. Alphabet has been reporting consistently strong performances in terms of both revenue growth and operating margin.
Data source: Alphabet quarterly reports. However, the market was not happy to hear that management was boosting its already lofty plans for capital expenditures this year by $15 billion. Previously, the company had guided for capex in the range of $180 billion to $190 billion.
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