The Motley Fool·2025-12-19 11:15Core Viewpoint - Nvidia and Alphabet are identified as strong investment opportunities in the AI sector heading into the new year, particularly for long-term growth [1]. Nvidia - Nvidia holds over 90% market share in the GPU market, primarily due to its established ecosystem and the CUDA software platform, which is essential for AI workloads [3]. - The acquisition of SchedMD enhances Nvidia's software capabilities by providing control over the AI orchestration layer through the Slurm platform, optimizing GPU task assignments [4]. - Nvidia's proprietary NvLink interconnect system allows for faster data transfer between GPUs, improving performance for large language model training [6]. - The company is well-positioned to benefit from increasing AI infrastructure spending, with significant growth potential as the AI market is still in its early stages [7]. Alphabet - Alphabet has developed its own custom AI chips, Tensor Processing Units (TPUs), which are optimized for its Tensorflow framework, providing a competitive edge over other cloud computing competitors [8]. - TPUs offer better price-performance and power efficiency, allowing Alphabet to train its AI models more cost-effectively, thus enhancing margins for its cloud computing business [9]. - The continuous improvement of Alphabet's Gemini model across its product ecosystem strengthens its market position, leveraging its existing search and advertising capabilities [11][12]. - Alphabet's advantages in cost, distribution, monetization, and data position it as a strong contender for long-term success in the AI space [13].