1. Nvidia (NASDAQ:NVDA)
Motley Fool Asset Management’s Stake: $163.46 Million
Nvidia’s (NASDAQ:NVDA) full-stack AI platform approach is expected to strengthen its moat in the coming months. Its ecosystem spans integrated hardware, networking, and software leadership, particularly CUDA. Two-thirds of data center sales already come from Grace Blackwell systems. Why does it matter? Grace Blackwell combines CPU, GPU, networking, and software into a tightly integrated AI system and locks customers into Nvidia’s full stack.
Networking is becoming a strong growth driver with strong revenue from NVLink, Spectrum-X, and InfiniBand.
Nvidia’s (NASDAQ:NVDA) new products are expected to keep boosting its revenue. Its Vera Rubin (R100) architecture, which is optimized for agentic AI. Companies are moving from simply training models to running them at scale, which supports Nvidia’s expectation that its data center revenue could hit $1 trillion.
Nvidia (NASDAQ:NVDA) has a forward P/E of roughly 20x to 22x, almost in line with that of the S&P 500. According to Goldman estimates, Nvidia is expected to drive 21% of the total earnings growth for the S&P 500 in 2026. With Big Tech companies expected to spend a whopping $600 billion on capital expenditures in 2026 alone and new AI use cases coming, Nvidia Corp (NASDAQ:NVDA) remains an attractive buy at the current levels.
Baron Opportunity Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2025 investor letter:
“At Baron, we are deep research, evidence-based investors. We are positive about AI because it is real. It is the most significant change to the global economy since the internet itself. Every digital interaction of today forward will have AI as the brains of the application. We have investments across all the layers of the AI stack and spanning industries. Our most successful investments to date have been in the infrastructure or compute layer. We were early investors in NVIDIA Corporation (NASDAQ:NVDA), over four years before the ChapGPT moment of November 2022, and it has been more than a 10-bagger for the Fund. Several of us spent a full day with founder and CEO Jensen Huang in the Fall of 2018, where he went to the white board to teach us about AI and why NVIDIA would win.”
While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about the cheapest AI stock.
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