Are You Prepared to Invest in the Stock Poised to Lead the Market for Years Ahead?

Over the last two years, artificial intelligence (AI) stocks have been a driving force behind the S&P 500's impressive gains, and the index is on track for another strong year, with a projected 13% rise. However, this surge in AI may not be a fleeting trend; instead, it could provide sustained momentum for the market well into the future.

Why is that? We're still in the early phases of the AI revolution, which are focused on expanding infrastructure and training AI systems to tackle complex problems. The next phases will involve deploying AI in practical applications—like AI-powered agents and robotics—across a wide range of industries.

This suggests that companies with a central role in the AI sector could see their stock values continue to rise over the long term. One company, in particular, appears especially well-positioned for this growth. Are you prepared to invest in a stock that could lead the market for many years? Let’s take a look at a business that could deliver substantial long-term returns for investors.

The world's biggest company

This leader in AI has seen its shares soar by 1,200% over the last five years, making it the most valuable company globally with a market capitalization exceeding $4 trillion. Despite this massive growth, the company still has significant potential ahead, thanks to its robust product lineup, ongoing innovation, and the expanding AI market. Experts anticipate that the AI sector, currently worth billions, will reach trillions of dollars within a few years.

And Nvidia ( NVDA -0.26%) is the stock that stands out as a likely long-term market leader. While Nvidia is widely recognized as the top designer of AI chips, its influence extends further. The company has leveraged its expertise to broaden its offerings, providing a suite of related products and services that make it the go-to choice for those building AI platforms. This is just one advantage, and there are several more reasons for optimism about Nvidia’s prospects.

One key factor is Nvidia’s dedication to innovation, as it aims to release updated graphics processing units (GPUs), or AI chips, every year. This commitment keeps Nvidia ahead of its competitors and should help it maintain its leadership position over time.

Building an AI community

Another strength for Nvidia is its network of partnerships and its thriving AI community, which enables collaboration and mutual benefit among participants.

For instance, Nvidia recently revealed a $5 billion investment in chipmaker Intel. As part of this partnership, Intel—renowned for its central processing units (CPUs)—is integrating Nvidia’s GPU technology into its PC systems, while Nvidia is incorporating Intel CPUs into its AI platforms for data centers. This collaboration gives Nvidia access to leading CPUs and expands its presence in the PC market.

Another significant initiative is Nvidia’s planned $100 billion investment in OpenAI, which will help the AI research lab grow its infrastructure—and purchase more Nvidia chips.

Nvidia has also shown it can successfully launch complex products and sustain high profit margins. At the end of last year, the company introduced its Blackwell architecture and chip, which led to double-digit revenue growth in the following quarters and gross margins above 70%. (This figure excludes the effect of a charge in the first quarter for orders that couldn’t be shipped to China due to export controls.)

Potential risks

Of course, Nvidia’s stock could face setbacks if there’s a slowdown in AI investment or delays in rolling out new products. These risks are present now and could persist in the future. However, I believe Nvidia is well-equipped to navigate these challenges. For example, when initial export restrictions were introduced a few years ago, Nvidia developed a GPU specifically to comply with the rules for sales to China.

Returning to our main question: Are you ready to invest in a stock that could lead the market for decades? Even after its recent surge, Nvidia’s shares aren’t excessively expensive. With a forward price-to-earnings ratio of 41, there’s still room for growth—especially since these estimates only account for the next year and don’t reflect potential gains further down the line.

That means now could be a good time to consider this company, as all the factors mentioned above point to a bright future—and suggest that Nvidia could remain a dominant force in the market for years to come.