A Once-in-a-Decade Opportunity: 1 Artificial Intelligence (AI) Stock to Buy Before It Soars 60%, According to Wall Street

Artificial intelligence (AI) stocks have generated tremendous growth for investors over the past few years. This period represented the early part of the AI boom, as large language models were trained, fueled by powerful chips, and we began to see the potential of AI. Investors rushed to get in on shares of these companies, aiming to bet on technology that would reshape industries and our daily lives.

Over the past year, however, investors have become more cautious about AI stocks. As tech giants from Amazon to Alphabet spend hundreds of billions of dollars on an infrastructure build-out, investors question whether this spending is sustainable and worthwhile considering the future revenue opportunity. This sentiment has weighed on AI stocks this year, causing ups and downs for some and even declines for others.

But this moment of uncertainty also means that certain high-quality AI stocks, ones with bright long-term outlooks, are now trading at reasonable or even cheap valuations. With this in mind, let's check out one of these once-in-a-decade buying opportunities. Here's one AI stock to buy before it soars 60%, according to Wall Street.

Image source: Getty Images.

A triple-digit gain over three years

This particular stock climbed more than 300% over the past three years, but this year, it's only advanced about 9%. Meanwhile, this player's earnings continue to roar higher. I'm talking about Nvidia (NASDAQ: NVDA). This tech giant was the star of the earliest stage of the AI boom because its AI chips, known as graphics processing units (GPUs), were the first to market and demonstrated their speed and efficiency. As rivals joined the space, Nvidia's commitment to innovation kept it a step ahead.

Since, the company has added a wide range of products and services to its portfolio, making itself the "go-to" place for anything AI. Nvidia has also developed platforms to serve the needs of specific industries, such as drug development for biotech and pharma companies. And Nvidia has expanded its presence in the AI field, most recently offering to buy the open-source AI platform Hugging Face.

Nvidia's work in AI has resulted in explosive growth in revenue and profit, particularly compared to levels many years ago -- when its GPUs primarily served the video gaming market.

NVDA Revenue (Annual) data by YCharts

And this has continued through the latest quarter, when Nvidia reported a 100% increase in revenue to $96 billion and a triple-digit gain in net income to $59 billion.

Tech giants' spending on AI

But as I mentioned above, general concerns about tech spending on AI have held Nvidia stock back from the increases investors had grown accustomed to in the earlier stages of the AI boom. The idea is that if cloud giants see that investments aren't translating into strong enough growth, they may slow spending. That could hurt Nvidia's revenue, particularly considering data center makes up more than 90% of it.

Against this backdrop, however, analysts remain optimistic. The average Wall Street estimate calls for a 60% increase in Nvidia stock over the coming 12 months.

Now, here's why I think such a gain is possible. First, Nvidia today is trading at 21x forward earnings estimates, which is a bargain for a company with such market leadership, a solid track record of earnings growth, and long-term prospects that remain positive. Investors may jump to get in on this opportunity.

And this brings me to my second point, and that's the long-term AI story. It's very possible that growth may ebb and flow, and any slowdown could weigh on the stock. But, over time, revenue growth should be significant considering the capabilities of AI and the fact that its rollout to address real-world problems is just beginning. Companies will clearly continue to apply this technology to their situations in order to gain in efficiency, reduce costs, and become more innovative.

All of this means Nvidia stock, well positioned for gains, may be a once-in-a-decade buy right now.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.