A look at the data would suggest that there hasn't been a bad time to buy Nvidia (NVDA +1.68%) stock over the past few years.
If you bought at the start of the artificial intelligence (AI) arms race in 2023, you're up over 1,180%. Even if you bought at its most recent peak (early November), you're only down about 10% from your investment, which showcases the strength of the stock. Normally, when investors see a stock hovering around all-time highs, they get a bit concerned and assume that the stock is "expensive."
However, that's not how investors should look at it. Trying to buy the best companies means you're likely buying into businesses that rarely trade at discounts. If it's a great business, finding stocks trading near all-time highs isn't necessarily a bad thing, as it shows that the business is executing at a high level and people know it.
Despite Nvidia being near its all-time high, I think it could be primed to skyrocket after Nov. 19, when it reports fiscal 2026 third-quarter results (for the period ending Oct. 31). If I'm right, investors should consider buying shares now, as Nvidia has plenty of room to run.
Image source: Nvidia.
Nvidia has been a huge winner in the AI arms race
Few have benefited as much from the AI arms race as Nvidia. It's done so well because its graphics processing units (GPUs) are best-in-class, and the infrastructure that supports them is also top tier. Furthermore, because Nvidia gained a first-mover advantage in 2023 when the AI arms race began, many of the hyperscalers (cloud computing specialists that operate data centers) in need of GPUs developed workloads around the Nvidia ecosystem, which locked them and their clients into using Nvidia's products for the foreseeable future. While this doesn't prevent clients from switching to an alternative, it makes a lot more work (and possibly additional spending) to choose a different computing supplier.
NASDAQ: NVDA
Key Data Points
The AI arms race is about to enter its fourth year, but it's far from over. AI hyperscalers announced record-setting capital expenditures of hundreds of billions of dollars during 2025, and upped that significantly during 2026. This backs up what Nvidia told investors during its Q2 conference call, when CEO Jensen Huang noted that they expect global data center capital expenditures to reach $600 billion in 2025 and rise to $3 trillion to $4 trillion by 2030.
If he's right, there's a massive amount of growth left in Nvidia's stock. Considering that Wall Street analysts expect Nvidia to generate $207 billion in revenue during FY 2026 (ending January 2026), that means Nvidia gets about a third of all AI capital expenditures. Should the market truly rise to a $3 trillion opportunity by 2030, Nvidia could generate $1 trillion in revenue. That would be an impressive return for shareholders, but it's definitely an optimistic projection.
Even if the final dollar figure is wrong, CEO Jensen Huang and his team at Nvidia have more information about upcoming demand than the average investor, and I think we can trust the general direction of the AI computing buildout trend. As a result, Nvidia looks primed to skyrocket heading into Q3 earnings.
Nvidia's stock isn't as expensive as some investors think
Nvidia has a strong track record of beating analyst expectations, and I don't foresee that changing in this quarter. The question is, how much will Nvidia outperform expectations? A massive beat, driven by sales of its high-end chips, could result in the stock spiking, as Nvidia doesn't carry an expensive stock price into Q3 earnings.
The stock trades for less than 30 times next year's earnings, which is about the same price tag as the second- and third-largest companies in the world.
Data by YCharts.
Considering that Nvidia is growing at a far faster pace than these three, it makes its stock look relatively cheap. It also indicates Nvidia stock could be primed to soar following earnings if it hints that its FY 2027 earnings could benefit from how massive the AI market is.
Nvidia is in the driver's seat of the AI arms race and has done an excellent job navigating at high speeds. I think this trend will continue, making Nvidia a great stock to buy now and hold for a long time.
