Forget SpaceX. I'm Loading Up on This Genius Artificial Intelligence (AI) Stock Instead.

Space Exploration Technologies, better known as SpaceX, may have captured the attention of many investors, but I think several stocks are far better investments today. One of the best may be sitting right under investors' noses.

Although it's the largest company in the world, I think Nvidia (NASDAQ: NVDA) is a far better buy, especially if 2027's artificial intelligence (AI) spending dwarfs 2026's figures. Investors are already seeing signs of this happening.

Image source: The Motley Fool.

2027 is shaping up to be another banner year for Nvidia

Nvidia has risen to become the world's largest company thanks to its dominance in the AI computing space. Its graphics processing units (GPUs) are widely considered the best computing units available and are utilized by nearly every major AI company.

Later this year, Nvidia's next generation of chips launches, which will drive even more growth. The Rubin chip architecture promises huge improvements, with an estimated 10 times cheaper cost to run AI inference and 4 times cheaper cost to train AI models. Those gains will drive some companies to upgrade the existing technology, and should also lead to huge improvements in future AI models. The new architecture will also bring a price hike, which will boost Nvidia's revenue, leading to more growth.

However, there's another source of growth available as well: increased spending. The more AI companies spend on computing infrastructure, the better an investment Nvidia will be. Next year, Nvidia believes that the AI hyperscalers will spend around $1 trillion on data center capital expenditures. That's up from $650 billion this year, and that increased spending will be exactly what the stock needs to reach new heights.

But don't just take Nvidia's word for it. One of the AI hyperscalers, Alphabet, told investors they should expect "significantly" higher capital expenditures in 2027 versus 2026. For reference, Alphabet plans to spend between $180 billion and $190 billion on data centers this year. That should lead to more gains for Nvidia's stock, as none of the growth looks priced into its stock right now.

NVDA PE Ratio (Forward) data by YCharts

Nvidia's shares trade for about 23 times forward earnings, just barely more expensive than the S&P 500 at 22. If next year's earnings projections are used, this metric tumbles to a mere 16 times forward earnings.

That's a low price to pay, and Nvidia's stock stands to rise throughout the remainder of 2026 and into 2027 to normal levels. That will lead to strong gains, making Nvidia a great stock to buy now and a far better investment than SpaceX.

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