If I Could Only Buy and Hold a Single Stock, This Would Be It

Key Points

• A single-stock portfolio is not a sound investing strategy due to its lack of diversification.

• Nvidia's total addressable market (TAM) is enormous and could grow even larger in the years ahead.

• 10 stocks we like better than Nvidia ›

Owning only a single stock is not a great strategy. If someone were to do that, they would be under-diversified, which is far too risky.

Yet as a thought experiment, it can be useful to imagine which stock someone should own in this scenario. I know which one I would pick: Nvidia (NASDAQ: NVDA). Here's why.

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Image source: Getty Images.

Nvidia's current growth engine

To get started, let's recall what has brought Nvidia to this point: its prominent role within the fast-growing artificial intelligence (AI) ecosystem.

Nvidia designs and sells graphics processing units (GPUs), which are used to train and deploy AI models. And as the use and popularity of AI models have exploded, so has Nvidia's data center business, which includes its AI chip business. In its most recent quarter (for the three months ending April 27), Nvidia's data center segment generated $39 billion in revenue, which was roughly 89% of the company's total revenue.

What's more, estimates of Nvidia's total addressable market (TAM) continue to grow as the use cases for AI models expand. Analysts from Bank of America, for example, estimate that Nvidia's TAM could reach $2 trillion thanks to the rise of AI business models.

So, how quickly could Nvidia capitalize on this lucrative market? Soon, according to most analysts. According to predictions compiled by Yahoo! Finance, Nvidia's total annual revenue should rise to $200 billion this fiscal year (the 12 months ending on Jan. 26, 2026). That represents an increase of 53% year over year. Furthermore, analysts expect Nvidia's revenue to increase to $250 billion the following fiscal year.

In other words, the AI revolution should provide plenty of fuel for Nvidia.

Nvidia's next growth engine

Investors, however, shouldn't have tunnel vision when it comes to Nvidia. Yes, it's true that large language models like ChatGPT are the most well-known AI systems today, but new systems will emerge.

In particular, the growth of robotics and autonomous vehicles is a trend quickly picking up steam. In recent weeks, Amazon announced it now has over 1 million AI-powered robots working in its fulfillment centers. The company now has more robots working in these facilities than human beings.

Meanwhile, Tesla recently debuted its new robotaxi service, joining Alphabet-owned Waymo, as both companies now offer driverless transportation. Needless to say, the addition of millions of robots and robotaxis will present an enormous opportunity for Nvidia. The companies behind these advanced robotic networks need computing power -- and a lot of it. As they scale their robotic networks, they will also need to scale their AI infrastructure, too.

Why Nvidia stock is a buy now

There are two great reasons to own Nvidia stock right now. First, the enormous TAM of $2 trillion shows that Nvidia has plenty of room to grow in the coming years. Second, its TAM could expand even further as emerging technologies like robotics and autonomous vehicles scale.

So, while I don't advocate any investor owning just one stock, if I had to buy and hold only one, Nvidia is the stock I would choose today.

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Bank of America is an advertising partner of Motley Fool Money. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Bank of America, Nvidia, and Tesla. The Motley Fool has a disclosure policy.