Choosing just one stock can be a daunting task for any investor, especially in a rapidly evolving sector like artificial intelligence (AI). The market is filled with companies claiming a piece of the AI revolution. However, if faced with the decision to buy only one AI stock over the next year, one company stands out with a compelling, foundational reason: Nvidia (NASDAQ: NVDA).
While market performance and innovation are key factors, the primary argument for selecting Nvidia rests on its indispensable role in building the very infrastructure powering the global AI expansion.
The Massive Build-Out of Global AI Infrastructure
Nvidia CEO Jensen Huang has championed concepts like “AI factories” and “sovereign AI.” These aren’t just buzzwords; they represent tangible, large-scale investment opportunities driving demand directly to Nvidia’s core business.
AI Factories: Think of these as highly specialized data centers purpose-built for the intensive demands of developing, training, and deploying AI models, particularly the large language models (LLMs) at the forefront of current AI capabilities.
Sovereign AI: This concept refers to nations and major entities building their own AI capabilities and infrastructure domestically, often for economic competitiveness, national security, or data privacy reasons.
These initiatives are translating into a massive global construction boom for advanced data centers. From the large “Stargate” campus in the UAE to Germany’s sovereign AI factory spearheaded by Deutsche Telekom, and numerous projects across Europe, the world is investing heavily in this new “intelligence infrastructure.” As Jensen Huang noted at a recent tech summit, AI is becoming a new industry, integral to this essential infrastructure adopted by countries and societies worldwide.
Nvidia’s Indispensable Position
Why does this infrastructure build-out point specifically to Nvidia? Because Nvidia provides the foundational technology required to power these AI factories. While their high-performance GPUs are widely known as the “engines” for training complex AI models, Nvidia’s value proposition extends across the entire ecosystem. Their software infrastructure and advanced networking solutions are also critical components, ensuring these vast data centers operate efficiently at scale.
Nvidia has established a dominant position in the AI chip market, with some estimates placing its market share as high as 95%. This leadership isn’t static; the company continues its rapid innovation cycle, moving from the successful Hopper architecture to the powerful Blackwell platform, with the next-generation Rubin already planned for 2026. This continuous technological advancement ensures Nvidia remains the go-to provider for the highest compute demands of cutting-edge AI.
The growth in Nvidia’s Data Center segment, showing a remarkable 73% year-over-year increase in recent results, directly reflects this surging demand driven by the global infrastructure build-out. Future demand from the expansion of “inference” (AI processing data in real-time) and the rise of “agentic AI” further solidifies this trend.
Valuing the AI Leader
Given its explosive growth and market dominance, concerns about Nvidia’s valuation are understandable. However, when considering its position as the foundational provider for a global infrastructure transformation, current valuations, such as a forward one-year P/E ratio around 25, can be seen as reasonable in the context of its high growth rates and significant profitability (boasting net profit margins around 52%). While Nvidia is no longer an early-stage opportunity promising 100x returns from a small investment, its fundamental role in powering the AI future makes it a solid candidate for continued growth and a cornerstone of an AI-focused portfolio.
Conclusion: The Key Reason
The core reason to pick Nvidia as the single AI stock for the next year boils down to its unique and irreplaceable role in the global construction of AI infrastructure. The worldwide push towards building “AI factories” and achieving “sovereign AI” directly translates into massive, sustained demand for Nvidia’s integrated suite of hardware, software, and networking solutions. As the world builds out this essential new intelligence layer, Nvidia is positioned as the primary beneficiary, making it the most compelling single AI stock pick for the foreseeable future.
