This artificial intelligence (AI) stock has a huge potential and has an incredibly low price

Key Points

• Artificial Intelligence (AI) spending could reach $4.8 trillion by 2033, and the company is profiting.

• It is a leading AI player and is still trading at an attractive rating for long-term investors.

• I like it more than 10 shares Nvidia›

If you're looking for potential for large-scale growth, check out Artificial Intelligence (AI) Stocks. According to the United Nations, the AI market is set to explode from its $189 billion valuation in 2023 to nearly $5 trillion by 2033. But despite these massive forecasts, one of the most popular AI stocks in today's market remains surprisingly cheap.

This popular AI stock is cheaper than you think

Are you looking for AI stocks that can directly benefit from the massive demand jump over the next decade? Check out nvidia (NASDAQ: NVDA). Many investors are already familiar with the company, but you may not understand how cheap the stocks are in fact. Property is already being created through Nvidia's inventory. But there's still plenty of room left to run.

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Before diving into Nvidia's incredibly inexpensive valuations, let's quickly see what makes this stock so special.

Nvidia is the world's largest GPU stock. Its hardware powers data centers around the world – data centers where AI developers rely on building, training and deploying models. End users also rely on data centers to use AI services, placing Nvidia's GPUs at the heart of the AI value chain. Recent estimates suggest that GPUs designed for AI use cases may have a market share of more than 90%.

How did Nvidia become dominant? Nvidia has invested heavily in developing the “wideest ecosystem” of software tools and developers, according to Sebastien Naji, analyst at William Blair. This allows you to control both the hardware and software components of the GPU. “And it's very easy to build applications and build AI models on top of those chips,” adds Naji.

Nvidia led the AI GPU market through early investment. Meanwhile, software focus allowed users to customize the chips and create “stickiness” in their products. Switching to competing chips is not just a hardware issue, it's also a software integration, providing NVIDIA with a durable moat around its business model.

Nvidia's sales have grown in heavy double digits over the years. And that total margin leads the industry. Still, as we see, stocks remain surprisingly cheap.

Is it now when you invest in Nvidia?

On the surface, Nvidia stocks look expensive. Stock trading is trading for nearly 30 times more sales. This is a huge premium of billions of dollars in stock. However, on a profit basis, the situation improves dramatically.

Yes, Nvidia's shares are trading on 54 times the subsequent revenue. However, sales are growing so rapidly, it is important to look at the company's progressive valuation. Based on what the company expects to acquire in the next 12 months, trade is selling just 39 times with advance revenues of just 39 times.

meanwhile, IntelAnother chip maker has struggled to maintain profitability. That revenue is expected autumn Approximately 5% of the next fiscal year. The company has failed to invest in AI opportunities, and the company is struggling to relate to the next generation of GPU space. You can easily see Nvidia's core strengths by comparing Intel to Nvidia on several important metrics. Nvidia has been well positioned for the recent and long term. Meanwhile, Intel's fate remains uncertain in both time frames.

YCHARTS estimates NVDA revenue growth for current fiscal year data

Compared to competitors like Intel, Nvidia is doing very well. But is 39x revenue actually a “budget” rating? That's if you're continuing to do math. The AI market is expected to continue to grow by 20% to 30% per year in nearly 10 years. in S&P 500 (snpindex: ^gspc) If you trade with 30x revenue, it won't take long for NVIDIA stocks to trade Below General market based on today's trading prices.

The key here is patience. If you are willing to hold Nvidia stocks in the long term, your high sustainable growth rate will quickly dig into the upfront valuation premium and you will dig out your stocks with hindsight. As with any advanced inventory, expect plenty of volatility along the way. However, if you are betting on AI stocks for a long time, Nvidia remains surprisingly cheap for patient shareholders.

Should I invest $1,000 in Nvidia now?

Consider this before purchasing shares on Nvidia.

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Ryan Vanzo has no position in any of the stocks mentioned. Motley Fools introduces and recommends Intel and Nvidia. Motley Fool recommends the following options: A short Intel phone for $24 in August 2025. Motley Fools have a disclosure policy.