Nvidia (NVDA 1.21%), the world's largest producer of discrete GPUs, is the top artificial intelligence (AI) stock for many investors. Most of the world's top AI companies use its chips to train their AI algorithms, and it locks in those clients with its proprietary services.
Nvidia's stock has already soared nearly 22,000% over the past decade -- lifting its market cap to $4.3 trillion and making it the world's most valuable company. However, the smart money will likely keep flowing into Nvidia's stock in March as the AI market continues expanding.
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Why is Nvidia still a great growth stock?
Nvidia once generated most of its revenue from selling gaming GPUs for PCs, but the lion's share now comes from its data center GPUs. Unlike CPUs, which are optimized for sequential tasks, GPUs are designed to process parallel tasks. That makes them better-suited for processing complex machine learning and AI tasks than stand-alone CPUs.
Nvidia established a first-mover advantage in this market, and it maintained that lead with its Turing (2019), Ampere (2020), Hopper (2022), and Blackwell (2024) chip architectures. It plans to launch its next chip architecture, Rubin, in the second half of this year. It controls more than 90% of the discrete GPU market, while AMD (AMD 3.13%) holds a single-digit share.
Nvidia's proprietary programming platform, CUDA (Compute Unified Device Architecture), enables developers to easily create AI applications optimized for its chips. The stickiness of that ecosystem, which includes other prisoner-taking services, reinforces its market dominance.
Nvidia directly invests in some of the fastest-growing AI companies, including OpenAI, and has secured major partnerships with government and commercial customers. In other words, it will continue selling the best picks and shovels for the ongoing AI gold rush.
NASDAQ: NVDA
Key Data Points
Why is the smart money still buying Nvidia's stock?
From fiscal 2026 (which ended in Jan. 2026) to fiscal 2029, analysts expect Nvidia's revenue and EPS to grow at CAGRs of 36% and 37%, respectively. Those are incredible growth rates for a stock that trades at 22 times forward earnings. It also repurchased a whopping $40.1 billion in shares in fiscal 2026, and it still has $58.5 billion left in its current buyback authorization.
Nvidia faces competition from AMD's cheaper data center GPUs and Broadcom's (AVGO 1.11%) custom AI accelerators, while export restrictions continue to throttle its chip sales to China. Yet it should easily overcome those challenges as it remains a linchpin of the AI market -- so it's still a great growth stock for long-term investors to accumulate.
