Missed Out on Nvidia? My Best AI Stocks to Buy and Hold

You might have missed the first leg of Nvidia (NASDAQ:NVDA)’s run, but the artificial intelligence (AI) story still has room. The trick now involves picking companies that earn steady cash while the world builds smarter systems.

When you look beyond Nvidia stock, check the basics: recurring revenue, pricing power, and cash flow that management can reinvest. And as always, respect valuation, as paying too much can crush returns even when the business executes well. So let’s look at two that could move your portfolio beyond Nvidia stock.

NVDA

Nvidia stock sells the computing engines that power modern AI. It designs graphics processing units (GPU) and networking gear that sit inside hyperscale data centres, and it pairs that hardware with a sticky software ecosystem. That relevance still looks strong because the biggest tech platforms keep spending on capacity, and Nvidia stock keeps shipping the parts that make those builds work. Over the last year, management leaned hard into its next wave of systems, and the market treated every update like a holiday.

Recent earnings put real numbers behind the hype. Nvidia delivered revenue of US$57 billion in its third quarter of fiscal 2026. The company continues to anchor the buildout of training and inference, so the business can keep growing if cloud capital spending stays high and customers keep chasing performance per watt. The brand also benefits from developer habit. Once teams build around a platform, switching hurts.

Now here’s the reason some investors may pause. A lot of optimism already sits inside the share price. A forward P/E around the mid-20s can work, but it leaves less room for stumbles. Any pause in orders, any tighter export rule, or any credible competition can hit harder when valuation runs hot. Nvidia stock can still win, but Canadians who buy today accept a higher price tag and a thinner margin for error.

2 to consider

Lumine Group (TSXV:LMN) offers Canadians a quieter way to ride the AI era. It owns vertical market software businesses that run essential tasks in specific industries, and it grows by buying more of those niche tools. That matters now because companies want automation and better decisions everywhere, not just in a chatbot. Lumine’s model lets it plug into the “AI budget” through practical software that businesses already need, then it adds new products through acquisitions.

The latest numbers show a compounding business in motion. Lumine reported revenue of US$549.4 million for the nine months ended Sept. 30, 2025. It also reported free cash flow available to shareholders of US$150 million over the same period. That cash gives it fuel for more deals, which keeps the flywheel spinning even when markets turn moody. The big risk comes from execution, as acquisitions drive much of the growth.

Descartes Systems Group (TSX:DSG) adds another Canadian option that benefits from the same push toward smarter operations. It sells logistics and supply-chain software that helps customers move goods, manage compliance, and reduce friction in shipping networks. Many companies spend on practical automation long before they chase moonshot AI projects, and Descartes lives in that budget line. In its fiscal 2026 third quarter, it reported revenue of US$187.7 million and diluted earnings per share (EPS) of US$0.50. Trading at 37 times earnings, it aims for steady performance. A slowdown in global trade can still cool results.

Bottom line

If you want a simple reason Lumine and Descartes could look like better buys right now, focus on expectations. Nvidia stock carries the weight of being the AI poster child, so the market demands constant perfection. Lumine and Descartes can win through quieter execution, with recurring revenue, disciplined reinvestment, and steady compounding year after year. You still need patience, and valuation still matters, but you do not need a single stock to stay magical forever.

The post Missed Out on Nvidia? My Best AI Stocks to Buy and Hold appeared first on The Motley Fool Canada.

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More reading

• Step Aside, Nvidia: This AI Stock is the Real Deal for Canadians in the Know
• How I’d Invest $20,000 of TFSA Cash in 2026
• Top Canadian Stocks to Buy With $25,000 in 2026
• Top Canadian Stocks to Buy With $5,000 in 2026
• 3 Growth Stocks That Could Turn $100,000 Into $1 Million by 2035, Starting Now

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Descartes Systems Group, Lumine Group, and Nvidia. The Motley Fool has a disclosure policy.