Prediction: Nvidia Will Outperform Alphabet and Amazon Combined Over the Next 3 Years

Key Points

Nvidia is rapidly growing due to huge demand for AI processing power.

Amazon and Alphabet are expanding long-term cloud infrastructure businesses that will thrive long after the AI build-out is complete.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) has been one of the best-performing stocks in the market over the past three-and-a-half years. However, I wouldn't be surprised if it extends that run over the next three years. I'm so confident in its trajectory that I think it can outperform Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) combined over that period. That would make it a no-brainer buy now.

So, if you think you've missed the Nvidia investment train, you haven't. Based on the math, there's a ton of upside left.

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Nvidia's upside is immense

The primary driver of Nvidia's business performance is the AI build-out. How long this flood of infrastructure spending will last is still unclear, but many industry experts and forecasters anticipate that spending will stay elevated until at least 2030. That means we're not even at the halfway point of this cycle, yet AI spending is still ramping up. All of the AI hyperscalers have told investors that they're ramping up capital expenditures to record levels in 2026, after breaking previous records in 2025. And they could be trending that way again in 2027. On Alphabet's recent Q1 conference call, management told investors: "Looking ahead, the strong results reinforce our conviction to invest the capital required to continue to capture the AI opportunity. And as a result, we expect our 2027 capex to significantly increase compared to 2026."

It's pretty easy to spot that another major increase is coming next year, which bodes well for companies like Nvidia. Its GPUs are the most popular parallel-processing units for training and running AI models. While other options are gaining traction (such as TPUs from Google), Nvidia's products remain a top choice for data center operators and AI software companies because they are so flexible.

Nvidia wasn't surprised at all that Alphabet projected a large capital expenditure budget increase next year, as it told investors months ago that it believes that global data center capital expenditures will rise from $600 billion in 2025 to $3 trillion to $4 trillion annually by 2030. That's a major growth runway and provides a massive opportunity for Nvidia's stock to outperform over the next few years. Even if Nvidia hits the low end of its growth trajectory, that would amount to a 38% compound annual growth rate from now until then.

Should Nvidia's stock parallel that growth trajectory, I have no doubt that it will outperform Alphabet and Amazon combined over the next three years.

Amazon and Alphabet are still solid investments in their own right

Just because Nvidia has the potential to outgrow both Amazon and Alphabet doesn't mean investors should ignore them. These two are solid businesses at the top of the cloud computing food chain. However, they're having to spend a ton of money right now to outfit their data centers (as well as build new ones) so that they and their clients can train and run AI models. As a result, their stock returns may not be as good over the next few years. But once this capital spending cycle is over, they could easily outperform Nvidia.

Nvidia requires recurring sales to drive revenue growth. Amazon's and Alphabet's cloud computing businesses operate on a usage-based model, so once the initial build-out is complete, these computing units essentially print money for their owners. This is a much better long-term business plan and will lead to Amazon and Alphabet being incredibly successful investments over the next decade.

Should you buy stock in Nvidia right now?

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Keithen Drury has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.