Once-in-a-Decade Buying Opportunity: This AI Stock That’s Soared 900% Over 5 Years Is the Cheapest of the “Magnificent Seven.”
This company is a leader in its field.
The Magnificent Seven stocks have driven the S&P 500 higher over recent years, thanks to their leadership in technology, many of them also prominent in artificial intelligence (AI). These companies operate in various specialty areas, from smartphones to social media, and have each established a strong track record of revenue growth.
Surprisingly, one of these AI stocks stands out as a once-in-a-decade buying opportunity – and it's also the cheapest of the group. This AI stock has surged more than 900% over the past five years and appears to be near its valuation low, making it a prime candidate for further gains as the AI trend continues. Let's delve into this unexpectedly affordable stock to consider purchasing now, before the price rises.
Before discussing this particular stock, let's briefly review the Magnificent Seven. Most individuals are likely familiar with these names, as they have built their reputations and businesses over time, with many products in the public eye. These companies include Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia (NVDA -1.43%), and Tesla.
Throughout recent years, investors have flocked to these stocks to bet on the AI story and technology in general. While valuations reached high levels at times, today, many of them are trading at reasonable prices, reflecting positive stock performance and significant earnings growth. Among the Magnificent Seven, Nvidia emerges as the best bargain, being both the biggest AI winner so far and the cheapest stock.
The company's focus on graphics processing units (GPUs) for essential AI tasks like model training has driven enormous earnings growth, with revenue and profit climbing in the double and triple digits quarter after quarter. In the latest period, Nvidia's revenue and profit reached $96 billion and $59 billion, respectively. Customers are drawn to Nvidia due to its fastest GPUs, a key advantage – speed leads to efficiency, potentially lowering costs over time.
Nvidia has expanded its offerings as the AI boom progresses, positioning itself for success in the upcoming stages of growth and the emergence of agentic AI. Nvidia recently entered the standalone central processing unit (CPU) market, a realm viewed as a major growth driver in the coming years, as CPUs power agentic AI. The company aims to become a leader in this market, which is valued at $200 billion.
Nvidia expects $20 billion in revenue from its first CPUs this year alone, offering reason to be optimistic about its future prospects. While Nvidia's rapid growth may keep its valuation somewhat restrained, I still consider today's price exceptionally cheap and potentially a once-in-a-decade opportunity for growth investors seeking a long-term AI victory.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
