If I Could Buy Only 1 Stock, This Would Be It

Narrowing down a portfolio to only one stock is a terrible investment strategy. However, it's an exercise worth doing to uncover your convictions and your fears. While you may be confident a certain quantum computing company is going to work out, you wouldn't put all of your eggs in that basket. Instead, most investors will balance long-term return potential with its estimated success rate, and my top stock marries those two into one of the most potent combinations ever seen in the stock market: Nvidia (NASDAQ: NVDA).

Investing in Nvidia is a bet that the artificial intelligence (AI) build-out will continue for many years uninterrupted. Considering the number of breakthroughs AI is delivering and the efficiencies it's unlocking in the workplace, it has already begun to prove its value. There's still a lot more to come, and demand for more AI computing power will remain the status quo for many more years. To top it off, Nvidia's stock is pretty cheap and well-positioned to deliver strong returns. All of this adds up to Nvidia being my top stock now, but there's even more to the picture.

Image source: Nvidia.

Nvidia has major growth ahead

The AI build-out has been incredible in 2026, but it's going to get even more intense during 2027. Nvidia estimates that the big five AI hyperscalers will make nearly $800 billion on data center capital expenditures (capex) in 2026, but that figure rises to $1.3 trillion in 2027. That's a 63% rise in just a year's time, which is simply incredible. However, Nvidia has provided forecasts that indicate it expects revenue to rise at a 70% pace.

So, despite Nvidia holding the largest market share and seeing several viable competitors emerge, it still expects to grow faster than the industry as a whole. That's dominance, and it showcases Nvidia's leadership position in this industry.

Furthermore, Nvidia estimates that global data center capex will rise to $3 trillion to $4 trillion annually by 2030, indicating solid long-term growth during the next few years. With Nvidia's graphics processing units (GPUs) being the AI industry standard, it's bound to grow at the same pace or faster than the overall market during this time span, which will lead to monster stock growth.

However, none of this is priced into the stock, which is what makes it such a good buy now.

Nvidia's stock is primed for major upside

Right now, Nvidia trades for a mere 28 times earnings.

NVDA PE Ratio data by YCharts

Compared to other big tech stocks, this is about an average valuation. The issue is, Nvidia is no average stock. Last quarter, its revenue rose 100%, and there's its 70% increase forecast for next year, which blows the growth of other big tech companies out of the water.

This isn't reflected in the share price, as evidenced by its fairly modest trailing earnings valuation. When next year's earnings projections are used to value the stock, Nvidia looks like an absolute bargain.

NVDA PE Ratio (Forward 1y) data by YCharts

At less than 14 times forward earnings, Nvidia is about as cheap as it gets for a company that has already told investors that it expects scorching growth next year. If they're telling investors, that means they have high confidence in that figure. I think the market hasn't identified this mismatch, although it could in the near future. As a result, I think investors would be smart to load up on the shares because it provides one of the highest return potentials of any stock on the market, and is nearly guaranteed to post those returns.

The AI build-out isn't slowing anytime soon, and that makes Nvidia my top stock to buy now.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.