We can’t deny it Nvidia (NVDA 2.15%) is the poster child of the artificial intelligence (AI) craze. The semiconductor sector has reached new heights thanks to significant investments from several tech giants looking to expand their network infrastructure and processing capabilities, leading to monster gains for the company and its shares.

Over the past five years, Nvidia shares have gone crazy, soaring 2,370% (as of November 27). The company struggled with Apple for the title of the largest global market capitalization.

But this sharp acceleration means it will be much more difficult to reproduce growth in the future. After an unprecedented run, should new investors considering Nvidia stock perhaps forget about it and buy two more? main AI actions right away?

Powering AI Infrastructure

Nvidia made a name for itself by selling the graphics processing units (GPUs) that power large computer systems used to help train AI models. The company has a ridiculous 88% market share in this sector. And the race among other companies to aggressively invest in this technology trend has led to high demand for Nvidia products and services.

In the most recent quarter (the third of its 2025 fiscal year, ending October 27), the company reported revenue of $35.1 billion, up 94% year-over-year. Perhaps even more impressive are Nvidia’s profits. The company posted an exceptional operating margin of 62%, allowing net profit to increase by 109% compared to the same period in fiscal 2024.

The market’s love affair with Nvidia has led to huge market share gains. And that resulted in a high valuation. The stock is trading at a price/earnings ratio (P/E) of 52.6, a premium of 58% over the Nasdaq-100 hint.

Some may say the valuation is reasonable. But investors should consider Nvidia’s competitive threats, namely that some of its biggest customers, like Microsoft And Amazonamong others, are working on developing their own AI chips. This introduces the risk that Nvidia will see demand and growth begin to decline as we look into the future.

Dominant Internet Companies

Nvidia is rightly getting a lot of love these days as its shares move higher with strong revenue and profit growth. But investors who might have missed the rally shouldn’t get distracted from companies that are Already leaders in the AI ​​race. I’m talking about Alphabet (GOOGL -0.17%) (GOOG -0.19%) And Metaplatforms (META 0.90%)two of the most dominant internet companies on the planet.

The advantage of both of these companies is that they already have a massive user base. Alphabet says it offers 15 different products and services that each serve at least half a billion people. And Meta’s family of social media apps collectively has 3.29 billion daily active users. No company may have such a scope within which to immediately introduce AI capabilities.

Alphabet has been investing in AI for decades, but it focused more on the area when CEO Sundar Pichai took over about a decade ago. Not only does its Gemini Broad Language Model (LLM) power all of its AI offerings, but AI also permeates much of what Google Cloud does, leading to strong customer growth.

Meta, on the other hand, has a Meta AI assistant aimed at users looking to find information or generate images. And it already has more than a million advertising clients using its Generative AI tools to more effectively target their ads to the right users.

Both of these companies have ample financial resources to continue moving forward. Not only do they generate significant free cash flow, but they also have impeccable balance sheets. It makes sense that executives at these companies aren’t holding back when it comes to pouring capital into AI-related investments.

If you’re not yet convinced about buying these two companies, consider their valuations. As of this writing, Alphabet and Meta are trading at P/E multiples of 22.4 and 26.8, respectively, much lower than Nvidia. This makes them two of the top AI stocks to consider buying instead of going with Nvidia.