Why Nvidia Could Remain the Most Important Stock of the 2020s

One of the most prominent artificial intelligence (AI) stocks has been Nvidia (NASDAQ: NVDA). The company posted blowout earnings when it announced results for its fourth quarter results for fiscal year 2026 (ended Jan. 25).

Even so, it wasn't enough for Wall Street, as Nvidia shares dropped after the earnings announcement. The reaction belies the company's key role in the AI age.

Nvidia has proven itself a critical part of the AI boom in the first half of this decade. Here's why it's positioned to persist as a dominant industry force, which can make it one of the most important stocks to own for the remainder of the 2020s.

Image source: Nvidia.

Nvidia's chip leadership

Nvidia made a name for itself with the creation of the graphics processing unit (GPU), enabling AI systems to crunch massive amounts of data with speed and efficiency. Although competition is intense, its leadership role in AI semiconductor chips remains hard to beat.

For example, in February, the company won a multiyear partnership with Meta Platforms, where it will provide millions of GPUs to the Facebook and Instagram parent. Meta and other tech conglomerates are spending big on AI computing capacity. In 2025, AI companies spent a whopping $1 trillion to build out tech infrastructure for artificial intelligence.

In addition, nations around the world are buying Nvidia GPUs as governments seek to build sovereign AI. South Korea, Germany, and Saudi Arabia are among the countries scooping up the company's products.

Thanks to these customers, Nvidia's data center division enjoyed record Q4 revenue of $62.3 billion, representing an impressive 75% jump up from the previous year. As a result, Q4 total sales hit an all-time high of $68.1 billion.

These impressive Q4 figures are just the start. Nvidia forecast fiscal first-quarter revenue of $78 billion, which represents a substantial increase from the prior year's $44.1 billion.

Nvidia sees years of sales growth ahead as the entire technology industry transitions to the advanced semiconductor chips needed for AI adoption. The existing computing tech was built on CPUs, but this older architecture must adopt GPUs used in accelerated computing for the horsepower needed in the AI era.

Nvidia's expansion beyond chips

Although its GPUs are generating massive revenue growth, the company seeks to evolve beyond its role as a chipmaker. By doing so, it diversifies its revenue streams while solidifying its position as one of the world's most important AI companies.

One of these areas is data center networking. AI systems process so much data that require fast network connections. Nvidia provides products for this, which are seeing strong adoption. In Q4, its networking sales rose a jaw-dropping 263% year over year to $11 billion.

The market for AI-related infrastructure is forecast to see tremendous growth over the next decade. Estimates predict industry expansion from $59 billion in 2025 to nearly $500 billion by 2034, providing a tailwind for Nvidia for the remainder of the 2020s.

The semiconductor giant is looking beyond data centers as well. It's working with telecommunications businesses to build the next generation of wireless networks, 6G, designed for AI's significant data bandwidth needs. The new 6G solution won't be just for mobile phones. It will be used for artificial intelligence to wirelessly manage robots, self-driving cars, and other physical AI systems.

As part of this effort, Nvidia agreed to a $1 billion equity investment in Nokia. Together, they are already testing 6G networks.

Nokia represents one of the many investments Nvidia has made to strengthen its position in the AI ecosystem. The chipmaker also invested in Uber Technologies to deliver a fleet of AI-powered self-driving vehicles for Uber's ride-hailing service. Intel is another example, partnering with Nvidia to deliver AI to PCs.

Nvidia's future solutions

Nvidia's influence ranges far. And it's continually pushing farther, as seen in its entry into the nascent field of quantum computing.

Last October, the company introduced its NVQLink architecture, which connects GPUs to quantum computers. Quantum machines can complete complex computations in minutes that would take centuries with today's supercomputers. GPUs help with correcting calculation errors in real time.

And the opportunity to buy Nvidia stock has arrived. After Wall Street's reaction to its fiscal Q4 results, the company's forward price-to-earnings (P/E) ratio, which indicates how much investors are willing to pay for a dollar of earnings based on estimates for the next 12 months, has dropped significantly.

Data by YCharts.

With a forward earnings multiple of about 22, Nvidia shares are at an attractive valuation not seen since the Trump administration's tariff announcements last April caused the stock market to crash.

This makes now the time to buy shares in one of the most important AI companies of the past few years, one that looks poised to maintain this importance through the rest of the decade.

Robert Izquierdo has positions in Intel, Meta Platforms, Nvidia, and Uber Technologies. The Motley Fool has positions in and recommends Intel, Meta Platforms, Nvidia, and Uber Technologies. The Motley Fool has a disclosure policy.