If I Could Only Buy 1 Artificial Intelligence (AI) Stock, This Would Be It
Keithen Drury, The Motley Fool
Fri, July 10, 2026 at 2:06 AM GMT+5:30
4 min read
- NVDA-0.66%
- ^GSPC+0.81%
While artificial intelligence (AI) investing is still a central theme in the market, some of the key players in that space haven’t been doing so hot lately. Nvidia (NASDAQ: NVDA) is one of them. It’s down by more than 16% from its all-time high. Furthermore, it’s only up around 6% this year, trailing the market’s nearly 9% gains, as measured by the S&P 500(SNPINDEX: ^GSPC). So not only has it been a poor performer overall, but the most basic investment an investor can make is outperforming it
However, I think the time is coming for Nvidia’s stock trend to turn around. If I were handcuffed and only allowed to buy one AI stock, I think it would be Nvidia. The company still stands right at the center of the AI build-out, and with massive growth in store, it’s a smart buy now
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The AI build-out is far from over
Nvidia makes graphics processing units (GPUs) and the ecosystem that supports their use. GPUs have been the top choice to provide AI processing power ever since the AI arms race kicked off in 2023, and Nvidia’s have been and remain best in class. Its latest-generation Rubin architecture, now shipping to customers, will drive further growth due to its markedly increased capabilities
However, Nvidia isn’t alone in the space. Other companies make fantastic GPUs, and custom chip designers are partnering with hyperscaler clients to tailor application-specific integrated circuits (ASICs) precisely for their intended workloads. This intensifying competition creates an execution risk for Nvidia
However, I think it’s still primed to dominate the accelerated computing market, as it’s growing at a faster rate than its GPU competitors, and ASICs by design are useful only for a narrow range of applications
The AI build-out pie is also getting bigger. This year, the four major hyperscalers alone are expected to spend a whopping $650 billion on capital expenditures. Next year, Nvidia projects that figure will rise to over $1 trillion. By the end of the decade, Nvidia expects $3 trillion to $4 trillion in global annual data center capital expenditures. If its forecasts are right, that creates a massive opportunity for all companies in the space, so Nvidia could lose some market share and still be a fantastic investment.
