If the first half of 2026 were a horse race between chipmaker Nvidia (NVDA +1.67%) and Google parent Alphabet (GOOG -1.18%) (GOOGL -1.17%), it would have been one of the most exciting six months in sports.
Alphabet took an early lead, but its Q4 2025 earnings release sent shares down, ceding the lead to Nvidia. Then the same thing happened to Nvidia after its earnings release a month later. Then it was neck and neck until Alphabet’s blowout Q1 earnings report boosted its stock price by 10%, allowing it to finish the first half up 14.3% to Nvidia’s 7.4%.
But I’m predicting the second half of the year will belong to Nvidia over Alphabet. Here’s why.
Image source: The Motley Fool.
Spend money to make money
As one of the so-called “hyperscalers” — the companies spending massive amounts on artificial intelligence (AI) infrastructure, including data centers — Alphabet is spending heavily on AI. And by “heavily,” we’re talking tens of billions of dollars per quarter. In the first half of 2026, total capital expenditures roughly doubled from the prior year to a total of $80.6 billion, primarily due to the AI build-out. All that spending resulted in the first quarter of negative free cash flow since the company went public in 2004.
And Alphabet’s not done by any stretch. The company raised its estimate for total 2026 capital expenditures to a midpoint of $200 billion, up from its previous midpoint of $185 billion.
Today’s Change
(-1.17%) $-3.93
Current Price
$332.78
Key Data Points
Market Cap
Day’s Range
$330.34 – $336.51
52wk Range
$187.82 – $408.61
Volume
12M
Avg Vol
33M
Gross Margin
60.94%
Dividend Yield
0.25%
Investors are starting to get nervous about the ever-increasing AI spending, wondering whether the eventual payoff will be worth the expense. But all that spending by Google and other hyperscalers has been great for Nvidia, which posted its highest-ever quarterly free cash flow of $48.6 billion in Q2.
With the hyperscalers showing no signs of slowing down their spending, the second half of 2026 looks great for Nvidia’s stock, which should easily outperform Alphabet’s.
John Bromels has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
