Investors are now fully aware of just how successful Nvidia (NVDA -0.03%) has become. What was once an enterprise focused on PC gaming has become a dominant artificial intelligence (AI) business with a market capitalization of $4.8 trillion. This is the most valuable company on the face of the planet.
Despite trading 15.6% off their peak (as of June 23), Nvidia shares are up 6.7% so far in 2026 and have skyrocketed 944% over the past five years.
You haven't missed the boat. Here's one reason to buy this leading AI stock right now.
Image source: The Motley Fool.
Listen to what management is saying
There might be no single leadership team on the planet facing a brighter spotlight than Nvidia's management group. It's led by Jensen Huang, who has held the top job at Nvidia since founding the business in 1993. The market listens closely to these executives to understand how the AI landscape will evolve, which makes sense given that they have front-row seats in the industry.
Chief Financial Officer Colette Kress recently gave investors one phenomenal projection that can turn the skeptics into believers. "AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of this decade," she said on Nvidia's first-quarter fiscal 2027 earnings call. It's worth reiterating that this forecast is on a yearly basis, not in total.
This calendar year, spending is expected to be $765 billion, based on research from Goldman Sachs. To reach the midpoint of Kress's prediction of $3.5 trillion in spending in 2029 implies a monster 358% rate of growth in three years.
Nvidia has a virtual monopoly position in the market for data center graphics processing units (GPUs). It is literally at the epicenter of the AI infrastructure boom, selling the necessary hardware and software that powers training and inference. The company's Blackwell architecture is seeing robust demand, and its newest Vera Rubin platform, built for agentic AI, will start shipments in the third quarter.
NASDAQ: NVDA
Key Data Points
Higher demand can lead to a higher stock price
Investors are smart to question Kress's outlook. She's incentivized to provide bullish commentary, as it can support Nvidia's share price. It's difficult to argue with the massive spending that's happening, though.
Assuming Kress's forecast is correct, Nvidia will continue to see tremendous demand. That's why investors should consider buying the stock right now, while it's at a compelling forward price-to-earnings ratio of 23.8. The business is best positioned to capitalize on the AI spending bonanza.
Sell-side analysts see Nvidia's revenue rising at a compound annual rate of 45.6% between fiscal 2026 and fiscal 2029. The consensus view is that adjusted diluted earnings per share will increase at a yearly clip of 48.8% during the same time. Fundamental gains like this can propel the stock.
