What Is 1 of the Best Artificial Intelligence (AI) Stocks to Buy Now?
Investors must figure out ways to profit from the ongoing AI trend.
Investors can no longer ignore the advent of artificial intelligence (AI). There are some experts who believe it will completely upend how the economy operates. And corporate executives are making strategic moves to better position their businesses for long-term success in an AI-driven world.
There are certainly investment implications. The best thing to do is to gain exposure in your portfolio to this tech revolution. What is one of the best AI stocks to buy now?
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Selling picks and shovels
The AI boom is on. And there has been no single business within this trend that can top Nvidia‘s (NVDA 0.27%) success. Its shares have skyrocketed 1,280% in the past five years (as of Sept. 26). That incredible run comes from unbelievable demand for the company’s graphics processing units (GPUs) that power AI data centers, helping to train large language models.
Nvidia is the classic pick-and-shovel investment. It sells the necessary infrastructure, consisting of its popular GPUs, as well as its CUDA programming platform, for customers to develop AI applications. Consequently, the business gains from the massive amount of AI-related spending that’s happening now.
Worth a closer look
Even after the stock’s jaw-dropping gain in recent years, the stock isn’t that expensive. Investors can scoop up shares at a forward price-to-earnings ratio of 39.7. This is what the market is asking in order to own the clear leader in the AI race.
Wall Street analysts expect Nvidia’s revenue and earnings per share to increase at compound annual rates of 34.9% and 35.5%, respectively, between fiscal 2025 and fiscal 2028. This is a very robust outlook that justifies buying the stock today.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
