Here Is My Top Artificial Intelligence (AI) Stock to Buy in May

Some investors who didn't buy artificial intelligence (AI) stocks last year may have worried that they missed their chance. Many of these stocks had soared, with valuations reaching sky-high levels, on optimism the technology would be the next big game changer -- as the internet was many years ago. In recent times, though, these top-performing stocks not only have taken a pause; in some cases they've actually plummeted.

The good news is that this stock movement isn't a reflection of AI's potential. The market remains compelling, and analysts forecast it may reach beyond $2 trillion in the coming decade. Instead, these recent stock price declines are linked to general concerns about the economy and earnings growth in the near term. Investors worry that President Donald Trump's move to impose tariffs on imports could increase prices and eventually hurt the overall economy.

So, even though companies in most industries could face challenges in the quarters ahead, there's reason to be optimistic about strong, well-established players. They have what it takes to manage difficult times and go on to grow. And all of this offers investors a fresh opportunity to get in on AI stocks at reasonable prices. With this in mind, one AI company in particular makes a fantastic buy right now in the month of May.

Image source: Getty Images.

An early AI player

This player jumped into the market right away, bringing its chips to AI customers before the AI boom took off, and it's demonstrated an impressive ability to evolve and innovate over time. I'm talking about chip giant Nvidia (NASDAQ: NVDA). In the company's early days, it generated most of its revenue by selling its graphics processing units (GPUs) to the gaming market, but in recent years, sales of GPUs and related products and services to AI customers have made up the greatest share of revenue. In fact, in the most recent quarter, AI-related sales made up 90% of overall revenue.

Nvidia dominates the AI chip market because its GPUs offer customers speed, efficiency, and other features that make them the best available. They also are the priciest, but customers such as Meta Platforms and Microsoft, for example, are eager to build the strongest of platforms, so they're willing to pay to reach their goals.

Nvidia, to maintain dominance, has put a big focus on innovation. The company pledges to update its GPUs annually and already has set out its road map for the coming two years.

Over the past couple of years, the AI boom has helped Nvidia generate double- and triple-digit revenue growth quarter after quarter. I like the fact that this is accompanied by a solid level of profitability, with gross margin surpassing 70% even during times when expenses are higher -- such as during the recent rollout of the Blackwell architecture and chip.

Catalysts right around the corner

It's clear to me that Nvidia makes a great long-term AI investment. But why is now in particular a good time to buy? Nvidia has a couple of potential near-term catalysts in the form of its fiscal first-quarter 2026 earnings report on May 28 and its shareholder meeting on June 25. The company just launched Blackwell this winter, and in its first quarter on the market it generated $11 billion in revenue. Demand for the platform has been high, so it's possible Nvidia will report another quarter of strong revenue, and that could offer the stock a boost in the near term.

And though Nvidia faces challenges, such as potential tariffs on imports and a U.S.-imposed halt on exports to China, the company has shown signs of finding solutions to its problems. For example, Nvidia recently launched an investment in U.S. manufacturing, and press reports suggest Nvidia aims to rework design of a chip to suit U.S. export rules. Any progress on projects aiming to beat those challenges could lift Nvidia stock price.

A dirt cheap valuation

If you buy Nvidia now, you'll get in on the stock at close to its lowest in a year in terms of price-to-forward earnings estimates. The stock is trading for 25 times earnings estimates, down from more than 48 times earlier this year.

All of this means that by investing in Nvidia shares before May 28, you'll get in on the stock at a bargain price and potentially benefit from some near-term catalysts. And here's the really good news: Even if the stock doesn't take off right away, it's still positioned for a win over time thanks to Nvidia's dominance and innovation in the high-growth AI market.

Don’t miss this second chance at a potentially lucrative opportunity

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On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $296,928!*
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• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,685!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of May 5, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.