Investors don't always need to be creative or clever to outperform the market. Sometimes the most obvious investment can be the one right in front of your face. Nvidia (NVDA +0.91%) is one of those stocks as 2026 gets underway.
Nvidia stock may no longer provide the same extraordinary gains as shareholders have seen in recent years. Shares rose about 40% in 2025 and have soared by about 860% over the past three years. Yet its business is still thriving. Here's why it's still a good time to buy Nvidia.
Image source: The Motley Fool.
Opportunity in AI remains
Sales are expected to jump another 65% year over year in Q4. The stock's valuation remains reasonable. Nvidia remains the leader in artificial intelligence (AI) with full-stack offerings. Perhaps that's why 90% of retail investors are expected to continue holding or buying AI stocks in the next year, according to The Motley Fool's 2026 AI Investor Outlook Report.
That optimism is also spread among several demographics. About two-thirds of Gen Z and millennial Americans expect strong long-term growth from AI-focused companies and their stocks. About 70% of high-income earners (defined as $150,000+) also share at view.
Motley Fool AI stock analyst Asit Sharma summed up that point of view this way: "AI is a generational investment opportunity ... Consistent, rational buying will help most investors tap into the industry's long-term potential while maintaining the peace of mind that comes from a strategic or even opportunistic approach to volatility."
Sharma sees the strongest opportunities in smaller semiconductor names, as well as companies that provide connectivity, memory, and storage within data centers. That would also all bode well for Nvidia's business.
More gains, less risk
While there may be bigger winners from the smaller companies Sharma alludes to, Nvidia's business will continue to grow as long as AI keeps expanding among various business sectors. Risk is also reduced with Nvidia, now that its business is well entrenched in the AI universe.
NASDAQ: NVDA
Key Data Points
Just because there are more knowns, though, doesn't mean there can't be more gains. In fact, some analysts still predict double-digit annual gains for Nvidia in 2026 and beyond. Nvidia still offers the most highly sought-after AI chips. It also provides solutions throughout the AI workflow, spanning enhanced infrastructure, high-quality enterprise software, and AI models.
Edge AI solutions are another catalyst for the company. Edge AI refers to the deployment of artificial intelligence algorithms directly on devices at the edge of a network, including smart cameras, Internet-of-Things devices, robots, and autonomous vehicles. The latter two areas are expected to experience significant growth in the years to come.
Nvidia shares were recently trading at a price-to-earnings (P/E) ratio of about 40. With more than 60% growth expected to continue as 2025 ends, it won't take long for the business to more than justify that valuation. 2026 has all the makings of another rewarding year for Nvidia shareholders.
