John Ballard, The Motley Fool
5 min read
If you have some extra cash that you won’t need for several years, putting it into growth stocks with durable competitive advantages could pay off. Nvidia (NASDAQ: NVDA) leads in AI computing, Spotify Technology (NYSE: SPOT) in audio streaming, and ServiceNow (NYSE: NOW) in software that runs companies’ daily operations. Better yet, all three trade at discounts to their typical valuations. Here’s why they’re worth buying now.
Nvidia
Nvidia designs the chips and computing systems that power artificial intelligence (AI) data centers. Management expects AI infrastructure spending to reach $3 trillion to $4 trillion a year by the end of the decade. That’s industrywide spending, not Nvidia’s revenue, but Nvidia can capture a large share of it.
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The stock is up about 18% over the past year, slightly ahead of the S&P 500‘s 13%, as revenue doubled year over year to about $96 billion in the quarter ending July 26, 2026. Management expects revenue to grow about 70% next fiscal year.
That outlook reflects a chip industry experiencing component shortages, including for memory chips. Nvidia’s advantage is that it sees both ends of the AI supply chain. At the September Goldman Sachs Communacopia + Technology conference, Nvidia CEO Jensen Huang explained that Nvidia’s size and decades-long relationships with trusted suppliers help it lock in what it needs. On the other end, it sells through the big cloud providers, server makers like Dell, newer AI cloud companies, and governments building their own AI.
That reach lets Nvidia track where new data centers are being built and powered around the world, giving it an early read on demand. It also gives Nvidia many paths to customers beyond a handful of tech giants. Nvidia said its non-hyperscaler revenue grew 138% year over year last quarter to $40 billion, almost as large as the $48 billion in revenue from hyperscalers like Microsoft.
Nvidia stock trades at about 23 times this year’s consensus earnings estimate — well below its three-year average of about 32. For a company that analysts expect to grow earnings at a 50% annualized rate, that’s a solid value.
Spotify Technology
Spotify’s music, podcast, and audiobook service reaches 788 million monthly users, including 306 million paying subscribers. Its 2030 targets call for mid-teens annual revenue growth and an operating margin above 20%, up from 13.5% in the third quarter.
