1 No-Brainer Artificial Intelligence (AI) Stock That Will Skyrocket By the End of 2026

When it comes to artificial intelligence (AI) investing, some investors are probably best served by not overthinking it. There are lots of AI investment opportunities, ranging from energy to infrastructure to chips to AI software. Some are more nuanced in terms of where best to invest. In the short term, it might help to focus on where the money is being made right now and which companies are growing the fastest in that space. Some of these options are going to work out in the long term, too.

One great example of this is Nvidia (NASDAQ: NVDA). Nvidia is already the world's largest company by market cap, but it still has plenty of potential growth left to tap into, and I think its stock is due to skyrocket by the end of this year. And, perhaps surprisingly for some, that growth could boost its long-term prospects as well.

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Nvidia's multi-year growth will propel it higher

Nvidia makes graphics processing units (GPUs), which are suited for accelerated computing workloads such as AI. AI demand makes up the majority of Nvidia's business now, and that isn't likely to change going forward. The biggest concern investors have with Nvidia is how long its growth will last. More and more investors are growing wary of all of the AI spending going on, and believe that if the AI hyperscalers don't see an immediate return on investment, they will cease building out their data center footprint.

That's far from the case, as many of these businesses view this technology as a must-invest area, and it's far better to spend than underinvest and be left behind. Nvidia projects that annual global data center capital expenditures will rise to $3 trillion to $4 trillion by the end of 2030, so there's still plenty of growth ahead, at least according to its projections.

However, if you look at how the stock is being valued, the market is only pricing in one year of strong growth, and market-matching growth after that.

Data by YCharts.

Nvidia's stock is priced at 36 times trailing earnings and 21 times forward earnings. This tells me that the market expects strong growth this year from Nvidia's stock, but maybe market-matching growth next year. With the S&P 500 trading for 20.6 times forward earnings, Nvidia doesn't have much of a premium.

However, if Nvidia's growth rate continues to impress in 2027, the stock will likely re-adjust its price higher to account for expected growth. Right now, the market hasn't done that, so there is still an opportunity to get in before it does. Once the market starts hearing capital expenditure projections for 2027, it will realize that Nvidia's stock doesn't have any of that growth priced in, and send it higher before the end of the year.

I have no idea when this will happen this year, but I am confident that a rise is coming, so investors should position themselves accordingly.

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