The Best Growth Stock to Buy With $500 Right Now
Key Points
Nvidia is offering investors great value, trading at 24 times next year's earnings estimates.
Nvidia’s data center revenue grew 25% over the previous quarter to $51 billion, driven by strong demand for its AI chips.
- 10 stocks we like better than Nvidia ›
Volatility has returned to the stock market in recent weeks, but one market sector, artificial intelligence (AI), remains a great place to find long-term opportunities for investors. Nvidia (NASDAQ: NVDA) is experiencing robust demand for its data center chips, yet the stock trades at just 24 times next year's earnings. This makes Nvidia an excellent stock to invest $500 in right now.
Image source: Nvidia.
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An undervalued high-growth tech stock
CEO Jensen Huang stated that its graphics processing units (GPUs) used by cloud service providers in their data centers are sold out. Third-quarter 2026 data center revenue, which accounts for 90% of Nvidia's business, increased 25% over the previous quarter to $51 billion. Every primary cloud provider is buying every GPU it can. High demand helps Nvidia's margins, which saw its net profit margin tick up to 56% in the quarter.
Nvidia is in the midst of a long-term transition from traditional computing, which has relied on central processing units (CPUs), to accelerated computing with more powerful GPUs. At the same time, the growing demand for AI-powered applications is piling on to the demand for these chips. These are two powerful shifts happening concurrently in computing that are creating a long runway of growth for Nvidia.
The stock's forward earnings multiple makes it a no-brainer growth stock to buy and hold. Investors are getting excellent value, setting the stage for potentially market-beating returns in 2026 and beyond. A $500 investment could turn into $1,000 or more within the next few years at the rate Nvidia is growing.
Should you invest $1,000 in Nvidia right now?
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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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