Artificial intelligence (AI) has been the major investing theme of the market over the past three years, and it looks as if 2026 will be no different. Hyperscalers are still spending tens of billions on data center construction, making any company that's participating in the AI infrastructure buildout a potentially great investment.
However, it takes a company with significant weighting in the major indexes to lead the entire market higher, so there are only a few candidates for stocks that can do this. The most obvious of them is Nvidia (NVDA 1.49%), and I think that it can lead the market higher in 2026 nearly by itself.
If you don't have enough exposure to Nvidia in your portfolio, it's not too late to buy. However, if you don't want to invest in Nvidia separately, it's a large part of some common indexes, so buying into funds that track them would also add meaningful exposure. Nvidia has led the market higher in each of the last three years, and I think it's likely to do the same for a fourth.
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Nvidia is a huge part of common indexes
Nvidia is a member of all the broad-market U.S. indexes that investors pay attention to. One is the Dow Jones Industrial Average (^DJI 1.39%). It's different from its peers because it's price weighted, not market-cap weighted. The price weighting method had its merits 100 years ago, when it was easier calculate an index's value using stock prices instead of companies' market caps, but it's a bit dated now. Still, because the Dow is a curated group of 30 of the most important companies in the country, many investors still look at it to gauge how the market and the economy are performing.
At about $185 per share, Nvidia's stock price isn't that high. So it's only the 20th-largest component of the index, making up about 2.3% of its weight. That's a far cry from the largest component, Goldman Sachs, which makes up about 12% of the index. However, Nvidia is still a vital part, as there are only 30 companies in the index.
NASDAQ: NVDA
Key Data Points
The S&P 500 (^GSPC 1.27%) and Nasdaq-100 are more investment-grade indexes, and have more significant exposure to Nvidia.
Nvidia makes up about 7.2% of the S&P 500 and 8.8% of the Nasdaq-100. So, if Nvidia does well, so will these indexes. However, if Nvidia is likely to outperform the index in general, then it's well worth adding additional shares on top of these indexes. One of the most popular ways to invest in the Nasdaq-100 is by buying an exchange-traded fund that tracks it, such as the Invesco QQQ (QQQ 1.46%).
But is Nvidia a buy for 2026?
Data center construction continues at a rapid pace
Nvidia is benefiting from massive spending on the construction of new AI data centers. Vast numbers of its graphics processing units (GPUs) are being installed in these data centers, where they provide the processing power to train and run AI models. While there are alternative computing solutions, none of them come with an ecosystem that can rival the one that Nvidia has created. This makes it the top dog in the AI accelerator space, and a bellwether for how the AI industry is doing as a whole.
For its fiscal 2027 (which will end in January 2027), Wall Street analysts expect its revenue to grow by 50%. Few companies achieve such remarkable growth rates, and even fewer large caps.
However, the trend won't stop in 2026. Nvidia and its peers have told investors that the AI buildout will last through at least 2030. Nvidia itself has noted that it expected global data center capital expenditures to reach $3 trillion to $4 trillion annually by 2030. That's a ton of growth, and if Nvidia can maintain its market share, it will lead the market higher not only in 2026, but also in the years beyond that.
I think Nvidia is well worth owning by itself, and investors should consider adding exposure to the stock beyond what they already have exposure to through whatever index funds they may own.
