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Although voices of doubt continue to rise, the artificial intelligence boom continues. Just this week, FY26 sales estimates for Nvidia NVDA have again rocketed higher, with a UBS analyst raising the top line forecast to $204 billion.

For reference, annual sales at Nvidia in 2022 were just $26 billion and in the trailing twelve months were $80 billion.

Because of the huge capex spending on AI infrastructure from other big tech companies, Nvidia has been a huge beneficiary, and experienced reoccurring earnings and sales upgrades. Here I will share three reasons why Nvidia is still a worthy investment at current levels, and share two market-beating stocks (Dell Technologies DELL and Advanced Micro Devices AMD) also set to benefit from AI.

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Powerful Momentum Carries Nvidia Stock Higher

For investors that want exposure to artificial intelligence, Nvidia stock is the most logical way to express it. As the technology is still in a nascent period, infrastructure investments dominate the market.

With its advanced GPUs, Nvidia is the only game in town for tech companies that need to up their computing power. This “picks and shovels” advantage has been the game changer for Nvidia and the reason why investors keep gobbling up the stock.

In the price action chart below, we can see Nvidia stock gapped higher this morning, breaking out from a technical bull flag. This is another win for the bulls, and I would not be surprised to see NVDA stock make another new all-time high in the near future.

Image Source: TradingView

Upward Trending Earnings Revisions Keep Investors Buying

After almost two years, Nvidia still maintains a Zacks Rank #1 (Strong Buy) rating.

I look at the Zacks rank every morning, and Nvidia has sat on it longer than any other stock I have seen. The continuous revisions higher to its earnings and sales estimates is truly a sight to behold and I certainly haven’t seen anything like it before.

In just the last month, earnings estimates have again been upgraded.

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Elevated But Reasonable Valuation Limits Nvidia Downside Risk

Today, Nvidia is trading at a one year forward earnings multiple of 50.7x, which is admittedly a relatively high level. However, Nvidia has long maintained a premium valuation, and this is just above its 10-year median of 42.5x.

It is also worth noting that EPS are forecast to grow at an incredible rate over the next 3-5 years. Analysts are projecting annual growth of 37.5% for profits, bolstering the elevated valuation.

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Advanced Micro Devices and Dell Technologies Look Like a Buy Too

Understandably for some investors, it is challenging psychologically to buy a stock like Nvidia. And really the best way to play this AI boom, is through a basket of stocks.

Two additional companies that are riding the AI boom are Dell Technologies and Advanced Micro Devices.

Dell Technologies currently enjoys a Zacks Rank #1 (Strong Buy) rating and is on the verge of a major technical breakout.

Just this morning, DELL stock cleared an upper level of resistance, possibly giving the green light to investors looking to buy the stock.

Image Source: TradingView

While AMD currently has a Zacks Rank #3 (Hold) rating, reflecting a flat earnings revision trend, it has very impressive growth estimates, nonetheless.

Sales growth is expected to accelerate next year to 25%, while EPS are expected to grow 33% annually over the next 3-5 years. Like both DELL and NVDA, AMD also shows strong momentum, which picked up in the last week. The stock has rallied nearly 10% in just the last three trading days.

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Bottom Line

The future of artificial intelligence is undeniably bright, and Nvidia stands to be a major beneficiary. With its powerful GPUs and dominant market share, Nvidia offers a compelling way to gain exposure to this booming industry. While the stock's valuation is high, strong earnings growth forecasts help justify the premium.

However, for investors hesitant about Nvidia's price tag, Dell Technologies and Advanced Micro Devices offer attractive alternatives. Both companies are well-positioned to capitalize on the AI boom, boasting strong growth potential and positive momentum.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.