Shares of Nvidia (NVDA 1.36%) trade up 32% over the last year at the time of writing; however, the company has been growing revenue and earnings at a much faster rate. The stock's forward price-to-earnings multiple is 24, which is attractive.
Nvidia's recent announcements at CES 2026 in Las Vegas revealed one important catalyst for the stock heading into the new year, which also highlights why this remains one of the best AI stocks to own for the long term.
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Nvidia's innovation is a key advantage
The stock's conservative valuation reflects concerns about increasing competition and overheated spending in AI across the tech sector. However, CEO Jensen Huang sees the AI opportunity just getting warmed up. He noted that there is approximately $10 trillion worth of legacy infrastructure being upgraded to handle the new era of accelerated computing for AI.
NASDAQ: NVDA
Key Data Points
To capitalize on this opportunity, Nvidia continues to stay a step ahead of competitors in the chip market. Its new Rubin AI platform is now in full production. Rubin features six different chips that take computing performance to the next level.
An essential feature of Rubin is that it significantly reduces costs for data centers running large AI workloads. This addresses one weakness in Nvidia's competitive position: Its chips are expensive. Nvidia converts 53% of its revenue into profit. But Rubin shows Nvidia is increasingly focused on lowering the total cost of ownership of its chips, which is strengthening its competitive position.
It's this kind of innovation that will keep Nvidia at the forefront of the AI market, and this is why the stock is a steal right now. Paying 24 times this year's earnings should set the stage for long-term market-beating returns.
