Back to News
investment

1 No-Brainer Artificial Intelligence (AI) Stock That Will Skyrocket By the End of 2026

newsfeedback@fool.com (Keithen Drury)
Loading...
4 min read
0 likes
⚡ Quantum Brief
AI-driven data center spending is projected to surge to $3–4 trillion annually by 2030, ensuring sustained demand for high-performance computing hardware through the decade. Nvidia dominates the AI chip market with GPUs optimized for accelerated computing, now comprising the majority of its revenue as global AI adoption accelerates. Despite being the world’s largest company by market cap, Nvidia’s stock valuation (36x trailing earnings) reflects only one year of strong growth, ignoring long-term potential. Investors underestimate AI’s strategic necessity, fearing short-term ROI concerns, but hyperscalers continue aggressive spending to avoid falling behind in the AI race. Analysts anticipate a 2026 stock surge as markets recognize unpriced 2027 growth, with Nvidia’s $1 trillion order pipeline signaling untapped expansion.
AI Audio Summary
0:00 / 0:00
Click to play
Untitled design (38).png
Quantum News · Media Library

By Keithen Drury – Mar 27, 2026 at 1:30PM ESTKey PointsElevated AI spending will likely last throughout at least 2030.Nvidia's stock is only pricing in one more year of strong growth. When it comes to artificial intelligence (AI) investing, some investors are probably best served by not overthinking it. There are lots of AI investment opportunities, ranging from energy to infrastructure to chips to AI software. Some are more nuanced in terms of where best to invest. In the short term, it might help to focus on where the money is being made right now and which companies are growing the fastest in that space. Some of these options are going to work out in the long term, too. One great example of this is Nvidia (NVDA 1.90%). Nvidia is already the world's largest company by market cap, but it still has plenty of potential growth left to tap into, and I think its stock is due to skyrocket by the end of this year. And, perhaps surprisingly for some, that growth could boost its long-term prospects as well. Image source: Getty Images. Nvidia's multi-year growth will propel it higher Nvidia makes graphics processing units (GPUs), which are suited for accelerated computing workloads such as AI. AI demand makes up the majority of Nvidia's business now, and that isn't likely to change going forward. The biggest concern investors have with Nvidia is how long its growth will last. More and more investors are growing wary of all of the AI spending going on, and believe that if the AI hyperscalers don't see an immediate return on investment, they will cease building out their data center footprint. That's far from the case, as many of these businesses view this technology as a must-invest area, and it's far better to spend than underinvest and be left behind. Nvidia projects that annual global data center capital expenditures will rise to $3 trillion to $4 trillion by the end of 2030, so there's still plenty of growth ahead, at least according to its projections. ExpandNASDAQ: NVDANvidiaToday's Change(-1.90%) $-3.25Current Price$167.99Key Data PointsMarket Cap$4.2TDay's Range$167.55 - $170.9652wk Range$86.62 - $212.19Volume5.3MAvg Vol177MGross Margin71.07%Dividend Yield0.02% However, if you look at how the stock is being valued, the market is only pricing in one year of strong growth, and market-matching growth after that. Data by YCharts. Nvidia's stock is priced at 36 times trailing earnings and 21 times forward earnings. This tells me that the market expects strong growth this year from Nvidia's stock, but maybe market-matching growth next year. With the S&P 500 trading for 20.6 times forward earnings, Nvidia doesn't have much of a premium. However, if Nvidia's growth rate continues to impress in 2027, the stock will likely re-adjust its price higher to account for expected growth. Right now, the market hasn't done that, so there is still an opportunity to get in before it does. Once the market starts hearing capital expenditure projections for 2027, it will realize that Nvidia's stock doesn't have any of that growth priced in, and send it higher before the end of the year. I have no idea when this will happen this year, but I am confident that a rise is coming, so investors should position themselves accordingly.Read NextMar 27, 2026 •By Adam SpataccoIf I Had $10,000 to Invest in Artificial Intelligence (AI) Right Now, I'd Split It Between These 3 StocksMar 27, 2026 •By Geoffrey Seiler8 Stocks I'd Buy if I Were Starting a Tech Portfolio From Scratch TodayMar 26, 2026 •By Daniel SparksNvidia Stock Has Gone Nowhere for 6 Months.

What Will It Take for Shares to Go Higher?Mar 26, 2026 •By Leo Sun3 Reasons Broadcom Could Be a Better AI Play Than NvidiaMar 26, 2026 •By David Jagielski, CPAThe Biggest Surprise About Nvidia's AI Conference: It Didn't Give the Stock a BoostMar 26, 2026 •By Adam SpataccoNvidia Just Reported a $1 Trillion Order Pipeline. Why Is the Stock Barely Moving? Here's What Investors Are Missing.About the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedNvidiaNASDAQ: NVDA$167.90(-1.95%)-$3.34*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Read Original

Tags

energy-climate
quantum-investment
quantum-algorithms

Source Information

Source: The Motley Fool

Discussion

0 professional contributions

Sign in to join this professional discussion.

Be the first to add a constructive contribution.