Not Anthropic. Not AMD. Here's My Top AI Stock for 2027.

2027 could be a huge year for artificial intelligence (AI) investing. Sometime in November, investors are likely to see an Anthropic IPO, bringing another rapidly growing $2 trillion company to the public markets. One of its competitors, OpenAI, could also be coming in the near future. However, I don't think either of those will be the best-performing 2027 AI stock.

Another stock investors are excited about is Advanced Micro Devices (NASDAQ: AMD). AMD has done a lot to put itself back in position for strong growth, and the market has rewarded the stock with about 200% in gains this year, good enough for a top-10 spot among the best-performing S&P 500 (SNPINDEX: ^GSPC) stocks. However, much of AMD's growth has already been priced into the stock, and 2027 could be a struggle.

Countless other names like Palantir Technologies (NASDAQ: PLTR) or Sandisk (NASDAQ: SNDK) are floating around as potential top investments, but I don't think any of them stand a chance after performing so well in 2026. Instead, I'm looking at the old guard and industry standard: Nvidia (NASDAQ: NVDA). I think it has as good a chance as any to be the best-performing AI stock in 2027, and I've got a pretty compelling reason why.

Image source: Getty Images.

Nvidia's returns aren't correlated to business success right now

Nvidia's share price performance in 2026 has been pretty lackluster. It's up nearly 30%, which is still crushing the market and a good gain overall, but it's not the soaring stock price investors are used to with this chip giant. Nvidia's business has been growing far faster than 30%. In the second quarter, Nvidia's revenue rose 106% year over year, and earnings per share (EPS) increased 128%. Growth rates like that indicate a stock that should be doing far better, but the market hasn't responded to Nvidia's incredible earnings at the same rate as before.

The market consensus is that Nvidia is too big to grow further, and other rising competitors, like AMD, should be valued higher. That's flawed thinking, and it opens up a major opportunity for investors to take advantage of during 2027.

The math backs up a huge Nvidia gain in 2027

Throughout 2026, Nvidia's price-to-earnings (P/E) ratio has dramatically declined due to the market not correlating business results with stock price performance.

Data by YCharts.

Now, it trades at 30 times earnings, which is about where you'd expect a big tech stock to trade. But Nvidia is growing far faster than any big tech stock and is forecast to do it again next year. During Nvidia's Q2 earnings call, the company told investors to expect 70% revenue growth in 2027, indicating its strong results will continue next year.

Wall Street analysts concur with this projection, and if next year's earnings are used to value the stock, Nvidia trades at a multiple of 15 times next year's earnings.

Data by YCharts.

So, if Nvidia hits expectations and rises back to a 30-times-earnings valuation, the stock will double.

Nvidia doesn't have to do anything out of the ordinary; it just needs to do what it says it will, and the market needs to value it as a 30-times-earnings stock. That's a layup for long-term investors, and Nvidia's stock price could easily double between now and the end of 2027 as a result.

While there could be other AI stocks that deliver greater than 100% returns in 2027 (there are plenty that did so far in 2026), Nvidia is about as obvious an AI investment as it gets. I think this bodes well for its future and makes it a strong buy right now.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.