Is Nvidia Stock the Best Buy Now?

Key Points

• Nvidia's GPUs are key computing units for AI.

• Management projects AI spending will rapidly grow through 2030.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) has been one of the best stocks to own during the ongoing AI arms race. However, after its impressive run, some investors may be hesitant about buying shares now, especially with its status as the world's largest company.

The AI arms race is far from over, and with AI spending expected to stay strong for many years to come, Nvidia certainly looks like a great buy. But is it the best stock to buy now?

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Image source: Getty Images.

Nvidia's growth has been incredible, but it's not done yet

Nvidia manufactures graphics processing units (GPUs), a computing unit that can perform multiple calculations in parallel. GPUs have been the primary computing device of choice for most AI hyperscalers, as they can also be connected in clusters to amplify this effect. It's not uncommon to hear about data centers with 100,000 or more GPUs in them, and with Nvidia having a dominant market share (most estimates peg Nvidia's data center GPU market share at 90% or greater), it translates into a ton of sales for Nvidia.

Nvidia's revenue growth over the past few years has been astronomical, although it has slowed a bit over the past few quarters.

NVDA Revenue (TTM) data by YCharts

Still, a 56% revenue growth rate is nothing to complain about. That's faster than many companies will ever grow, yet Nvidia achieves this regularly. Furthermore, with management's market trajectory projections, Nvidia's rapid growth rate may stay elevated for a long time.

If management's projections pan out, Nvidia could be the best stock to buy right now

The biggest question surrounding Nvidia isn't really if it can maintain its dominance; it's if the AI hyperscalers can continue growing their AI infrastructure spending. This has already been a record year for data center capital expenditures, but many of the AI hyperscalers have already told investors to expect even greater spending in 2026.

This aligns with what Nvidia's management told investors during its Q2 conference call, as it projects that worldwide data center capital expenditures will reach $3 trillion to $4 trillion by 2030. Considering that Nvidia estimates that the big four AI hyperscalers will spend around $600 billion by 2030, that's monster growth.

Wall Street estimates that Nvidia will generate around $206 billion by fiscal year 2026 (ending January 2026), so Nvidia gets approximately a third of all data center capital expenditure costs. By using that logic, Nvidia could be generating $1 trillion to $1.3 trillion in revenue by 2030.

That would indicate a compounded annual growth rate (CAGR) of 37% on the low end, which is an incredibly impressive growth rate to sustain for such a time frame. If Nvidia can do that, there's no doubt that it would be the best stock in the market to buy right now.

However, I think it's smart to bake a bit of conservatism into these estimates. Let's say the market opportunity is half of what management projects: $1.5 trillion. With Nvidia having a one-third market share, its CAGR would still be 19%, which is significantly higher than the 10% growth rate typically seen in the broader market. This growth rate would still make Nvidia a fantastic stock to buy now, although it may not be the best if it achieves that growth rate.

Nvidia is a top stock to buy in the market as long as AI infrastructure spending stays elevated. Nvidia's management believes that trend is still slated to continue through 2030 and beyond, and by buying now, investors can still make a massive profit from one of the world's most dominant companies.

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