Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google has seen better days than the best tech stocks to buy now, like Nvidia (NASDAQ:NVDA). While the company’s search engine still reigns supreme, its recent mishaps and setbacks in the artificial intelligence (AI) race have questioned its future dominance.
That’s because AI has the potential to upend and nullify the search engine industry completely. The reason for this is the nature of how AI answers questions. Rather than users plugging a question into a search bar and then digging through results to find the answer, AI aims to give the right answer immediately.
Moreover, Google’s own Gemini AI had a rocky start this year. In February, the media lambasted it for its inability to accurately generate images of historical figures like the Pope and WWII soldiers. As a result, some of the best tech stocks to buy right now could be those quietly undermining Google’s prowess with their growth.
Microsoft (MSFT)
One of the most dominant tech stocks to buy right now is Microsoft (NASDAQ:MSFT), thanks to its strategic partnerships and advanced data center infrastructure. Whether it was foresight or just luck, Microsoft’s Azure cloud computing services were primed for the AI revolution, and its ability to use them became even more efficient through its partnership with OpenAI.
The company has focused on AI and the necessary architecture to support it. One example of this strategy is its new AI-powered laptop line. It achieves this primarily through its licensed ARM architecture computer chips and its rebranding of Bing AI into its Copilot AI suite.
These technical decisions show MSFT’s confidence in AI’s potential to eat away at Google’s search revenues. They are also part of why Microsoft is now the world’s largest company by market cap. Despite its high stock price, many analysts agree that MSFT is still one of the best tech stocks to buy.
Amazon (AMZN)
Another mega-cap tech company, Amazon (NASDAQ:AMZN), does not directly compete with Google for search revenue or large language model technology. Still, it stands to gain from a weakened Google cloud computing segment. Amazon Web Services (AWS) and Google Cloud Platform (GCP) offer cloud computing services for startups and smaller businesses looking for offsite solutions, with AWS earning a larger global market share than GCP.
Should Google search revenues weaken due to AI integration into personal devices, Amazon could outpace Google’s ability to expand its data center networks, ultimately taking future market share for itself. That’s even more exciting when you consider that AWS revenue sits at around $43 billion per year compared to GCP’s $10 billion.
Beyond this, Amazon continues aggressively expanding its reach into industries beyond tech, such as media, grocery and retail. These strategies have led AMZN stock to grow by 22.76% year-to-date, and it doesn’t look to be slowing down just yet.
Meta Platforms (META)
The core of Google’s search revenue comes from advertising, much like Meta Platforms’ (NASDAQ:META). Another critical contributor to Google’s advertising revenue is YouTube, which derived $31.5 billion in revenue in 2023 and is now in direct competition with Meta’s Instagram for short-form content. Thanks to their popularization on Bytedance’s TikTok, these sub-one-minute vertical video feeds are now the dominant drivers of engagement for both Meta and Google.
Should a TikTok ban take effect, Google will need to aggressively fill the vacuum in the U.S. market before Meta does, or it could lose out on substantial advertising revenues. However, if Google’s cash flows weaken by then, Meta could swoop in and outpace the growth of YouTube Shorts with Instagram Reels.
While it’s hard to say when or how this could happen, it’s an example of how knowing which tech stocks to buy as they battle for market share can lead to generous returns.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
