Forget Waiting for a Dip: Nvidia (NVDA) Is Worth Buying Today Based on The Motley Fool's Long-Term Conviction Ratings

The Motley Fool has created an AI database system known as Moneyball that ranks stocks on several factors. Nvidia (NASDAQ: NVDA) is one of the highest-ranking stocks on the list, scoring an impressive 94 out of 100. That shows that, based on the Moneyball criteria, it's one of the best stocks available to buy and hold for the long term, and I believe that it's likely the top stock in the market to buy right now.

Plus, there is no reason to sit around and wait for a dip to buy it; it's an excellent value today.

Image source: The Motley Fool.

Nvidia has multiple factors going for it

Nvidia has always been a great stock to buy and hold, but the massive demand curve for its wares created by the rise of AI computing has surpassed all of its previous tailwinds. It started in 2023, and Nvidia stock hasn't looked back from the initial rise of AI computing demand. Now, with a market cap of $5.5 trillion, it's the world's largest company, but I don't think it's remotely close to wrapping up this growth phase.

The reality is that over the next few years, Nvidia may widen the gap between its market cap and the second-largest company (currently Apple, valued at just under $5 trillion). Nvidia isn't trying to be secretive about what's coming; it's openly sharing that information with investors.

In its next fiscal year, it expects to grow its revenues by an impressive 70%, driven by increased spending from the AI hyperscalers. In 2026, Nvidia estimates that the big five hyperscalers will spend nearly $800 billion on capital expenditures. That figure is projected to rise to $1.3 trillion next year, and Nvidia expects global data center capital expenditures to reach $3 trillion to $4 trillion by 2030. Given Nvidia's still-dominant position in the AI accelerator market, those capex forecasts portend a massive amount of growth still coming for it, which makes today's stock price seem like an absolute bargain.

Nvidia isn't expensive at all

Somewhere along the way, Nvidia got the reputation for being an expensive stock. That couldn't be further from the truth.

The S&P 500 (SNPINDEX: ^GSPC) index is normally used as a measuring stick to assess how expensive a stock is. Right now, the S&P 500 trades at 25.3 times trailing earnings and 20.1 times forward earnings. That's on the high end of its historical range, but given the rapid growth the world's largest companies are experiencing, this premium shouldn't surprise investors.

However, Nvidia isn't really that much more expensive than those averages.

NVDA PE Ratio data by YCharts.

The few percentage points of premium valuation Nvidia has over the S&P 500 are completely justified, especially when you factor in that Nvidia grew its revenue by 106% year over year in its last fiscal quarter. However, if you look at the stock's valuation relative to next year's estimates, it starts to get very attractive.

NVDA PE Ratio (Forward 1y) data by YCharts.

Right now, it trades just 14.5 times next year's expected earnings, so if Nvidia meets analysts' estimates, its stock will be cheap in retrospect. The reality is it will never get that cheap, and if Nvidia's stock rises to its current trailing earnings valuation of 29 by the end of next fiscal year, the stock will have doubled. It's rare to find a stock that has a clear path to doubling in plain sight, but that's what Nvidia is providing to investors.

As a result, I think it's one of the best stocks to buy in the market, and the rankings from The Motley Fool Moneyball database back up that analysis. There's no reason to wait for a dip in Nvidia's stock; it's an excellent buy today, and investors shouldn't wait too long, as another rally could be coming before the end of the year.

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