NVIDIA (NASDAQ: NVDA)The world’s largest independent GPU producer is a 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 target these customers with their proprietary services.
Over the past decade, Nvidia’s stock price has soared nearly 22,000%, giving it a market capitalization of $4.3 trillion, making it the world’s most valuable company. However, as the artificial intelligence market continues to expand, smart money will likely continue to flow into Nvidia stock in March.
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Nvidia once derived most of its revenue from selling PC gaming GPUs, but now the lion’s share comes from its data center GPUs. Unlike CPUs, which are optimized for sequential tasks, GPUs are designed to handle parallel tasks. This makes them better suited than standalone CPUs for handling complex machine learning and artificial intelligence tasks.
Nvidia has established a first-mover advantage in this market and has maintained its leadership position with Turing (2019), Ampere (2020), Hopper (2022) and Blackwell (2024) chip architectures. It plans to launch Rubin, its next-generation chip architecture, in the second half of this year. It controls over 90% of the discrete GPU market, and AMD (NASDAQ:AMD) Holds single-digit shares.
Nvidia’s proprietary programming platform, CUDA (Compute Unified Device Architecture), enables developers to easily create AI applications optimized for its chips. The stickiness of the ecosystem (including other captive services) enhances its market dominance.
Nvidia has direct investments in some of the fastest-growing artificial intelligence companies, including OpenAI, and has established important partnerships with government and commercial customers. In other words, it will continue to sell the best picks and shovels for the ongoing AI gold rush.
From fiscal 2026 (ending January 2026) to fiscal 2029, analysts expect Nvidia’s revenue and earnings per share to grow at a compound annual growth rate of 36% and 37%, respectively. That’s an incredible growth rate for a stock that trades at 22 times forward earnings. It also repurchased $40.1 billion worth of stock in fiscal 2026, with $58.5 billion remaining in its current repurchase authorization.
Nvidia faces competition from AMD with cheaper data center GPUs Broadcomof (NASDAQ:AVGO) custom artificial intelligence accelerator, while export restrictions continue to limit its chip sales to China. However, it should easily overcome these challenges as it remains a key player in the artificial intelligence market, so it remains a great growth stock worth accumulating for long-term investors.
Before buying Nvidia stock, consider the following factors:
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has a position and recommends Advanced Micro Devices and Nvidia. “Motley Fool” recommends Broadcom. The Motley Fool has a disclosure policy.
The artificial intelligence (AI) stocks smart money is buying this March originally published by The Motley Fool