Growth investors keen on artificial intelligence (AI) should look towards established tech giants like Alphabet (GOOG, GOOGL) and Meta Platforms (META). These companies are leveraging massive AI investments to drive significant growth in their core businesses, particularly in advertising, with potential for future expansion yet to be fully priced in by the market.
Alphabet’s AI-powered search features and expanding cloud services, coupled with Meta’s advanced AI models enhancing its advertising platforms, showcase the transformative power of AI. Both companies demonstrate strong revenue growth and profitability, making them compelling long-term AI stock picks.
The Best AI Stocks for Growth Investors to Buy in 2026
For investors seeking substantial growth powered by artificial intelligence (AI), the path forward is clearer than ever. The titans of the tech world, already the largest and most profitable, present compelling opportunities from risk, growth, and valuation standpoints. While concerns about advertising-dependent revenue cycles exist for giants like Alphabet (GOOG, GOOGL) and Meta Platforms (META), AI is poised to unlock unprecedented growth in their advertising businesses, a potential not yet fully reflected in their current valuations.
Alphabet's AI-Driven Ascendancy
Alphabet's stock has experienced a remarkable surge, climbing 136% over the past year. This impressive performance is underpinned by strategic investments in cutting-edge AI infrastructure, including advanced chips, robust data centers, and sophisticated AI models. These resources are instrumental in enhancing AI-driven features across its flagship products like Google Search, YouTube, and its cloud services.
Contrary to early skepticism about AI's impact on Google Search, the company's Gemini AI chatbot has consistently ranked among the leaders. Gemini is powering innovative features such as AI Mode and AI Overviews, which are demonstrably increasing user engagement and search volume. This has translated into a significant 19% year-over-year increase in search revenue during the first quarter.
Furthermore, Google Cloud is asserting its dominance as the fastest-growing enterprise cloud platform among the "Magnificent Seven." Its growth trajectory accelerated in Q1, with segment revenue soaring by an impressive 63% year over year. This sustained expansion highlights the strength of Google's cloud offerings and its ability to capture market share.
NASDAQ: GOOGL
Alphabet
Alphabet's AI advantage is built upon a formidable infrastructure, encompassing a vast portfolio of high-performance chips, including its proprietary Tensor Processing Units (TPUs) and **Nvidia's (NVDA)** GPUs. This powerful hardware underpins not only its customer-facing AI features but also its internal operations, with AI now generating nearly 75% of its software code. This efficiency drives profitability, enabling reinvestment in further chip development and data center expansion, creating a self-sustaining growth cycle.
With a robust 22% year-over-year revenue growth and a high operating margin of 36%, Alphabet stands out as a premier AI stock for long-term investment. Despite its recent performance, the shares remain attractively valued, trading at a reasonable forward price-to-earnings multiple of 29.
Meta Platforms: Reinventing Digital Advertising with AI
Meta Platforms is at the forefront of developing sophisticated AI infrastructure tailored for the digital advertising landscape. This technological prowess is already fueling significant ad revenue growth across its diverse platforms, including Facebook, Threads, WhatsApp, and Instagram. Much like Google's journey, Wall Street may be underestimating Meta's AI-driven potential.
Meta's AI capabilities, exemplified by its Generative Ads Recommendation Model (GEM), are trained on vast arrays of GPUs. The primary objective is to refine ad recommendations and enhance performance, and the latest metrics confirm its success. In the first quarter, Meta's ad-centric revenue surged by an impressive 33% year over year.
NASDAQ: META
Meta Platforms
Evidence of AI's positive impact on Meta's ad business is evident in the balanced growth of ad impressions and pricing. Ad impressions rose 19% year over year, while the average price per ad saw a 12% increase. These are robust figures that underscore the potential for advanced AI to drive even more substantial gains in the future.
Meta is still in the early stages of leveraging AI. While some investors may express concern over the accelerating capital expenditures on chips and data centers, these investments are directly fueling the impressive growth in its ad business. Recent enhancements to Meta's Lattice and GEM model architecture have led to a 6% improvement in conversion rates for landing page view ads.
The company's AI integration is set to deepen with the incorporation of its Spark AI model into recommendation systems across its application suite. Spark has already contributed to improvements in the Meta AI assistant and promises to add a more sophisticated reasoning layer to advertisements, potentially driving significant revenue growth for years to come.
Despite remarkable revenue growth and a 62% year-over-year increase in earnings in Q1, Meta stock remains accessible at an attractive valuation, trading at just 20 times this year's estimated earnings.
