Nvidia's AI Dominance Faces Challenges Amid Soaring Stock Price

Nvidia's Biggest Skeptic Sees Its Shares Losing 10% in 2025 -- Is Wall Street Overlooking Tangible Concerns With This Artificial Intelligence (AI) Leader? | The Motley Fool

A perfect storm may be brewing for Wall Street's leading AI stock in the new year. In case you haven't noticed, the bulls have been in full control on Wall Street for more than two years. In 2024, the iconic Dow Jones Industrial Average, broad-based S&P 500, and innovation-powered Nasdaq Composite respectively rose by 13%, 23%, and 29%, and achieved multiple record-closing highs. While there's no singular catalyst behind this outperformance, the rise of artificial intelligence (AI) has, arguably, played the biggest role in sending Wall Street's major indexes to all-time highs. With AI, software and systems have the ability to become more proficient at their tasks over time and can learn new skills without human intervention. This capacity to learn and evolve over time gives AI seemingly limitless long-term potential. Though no shortage of stocks has benefited from the AI revolution, none is the face of this movement more than semiconductor colossus Nvidia (NVDA -0.02%). Since the start of 2023, Nvidia's market cap has increased by $3.3 trillion (roughly a 10X rise) -- and its outperformance hasn't been lost on Wall Street or its analysts. As of the closing bell on Jan. 6, more than five dozen analysts had weighed in on Nvidia stock, with 60 out of the 64 considering it the equivalent of a "strong buy" or "buy." The remaining four view Nvidia shares as the equivalent of a "hold," with not a single "underperform" or "sell" rating. It begs the question: Is Wall Street overly optimistic and overlooking tangible concerns with this AI colossus? Among the analysts and financial institutions that have issued a price target for Nvidia stock, the near-universal opinion is that it's headed higher. The average of these price targets comes out to more than $172 per share, with Rosenblatt's Hans Mosesmann claiming the Street's most-aggressive price target of $220 per share. If Mosesmann's price target proves accurate, Nvidia would near a $5.4 trillion valuation. On the opposite end of the spectrum is D.A. Davidson analyst Gil Luria, who has a neutral (hold-equivalent) rating on Nvidia and a $135 price target. Until Nov. 21, Luria and his firm had a $90 price target on Nvidia, but substantially raised it (while keeping the neutral rating) following the company's fiscal 2025 third-quarter operating results. Based on Nvidia's closing price on Jan. 6, Luria's price target would represent a roughly 10% decline in the new year. This makes Luria, by default, Nvidia's biggest skeptic on Wall Street. In an interview with CNBC's Squawk on the Street earlier this week, Luria laid out his thesis for remaining cautious on Nvidia. In particular, he pointed to the importance of AI use cases expanding. While noting that companies like Meta Platforms (META -1.16%) are seeing demonstrable benefits in terms of ad sales by deploying AI solutions, Luria intimated that real-world instances of AI generating positive returns on investment for businesses are limited. If the application of AI fails to evolve in the new year, it may spell trouble for Nvidia. Additionally, Luria referenced comments made by Microsoft (MSFT 0.52%) CEO Satya Nadella in a recent podcast where Nadella pointed to his company no longer being (AI) chip-constrained. In Luria's view, this suggests Microsoft, which is Nvidia's largest customer, may reassess its AI capital spending and slow it down a bit once its fiscal year ends on June 30. However, Luria's skepticism may be just the tip of the iceberg for Wall Street's leading AI stock. To add to his commentary about Microsoft potentially reexamining its capital spending on AI data-center hardware, many of Nvidia's top customers by net sales are developing AI-graphics processing units (GPUs) of their own. This includes Microsoft, Meta Platforms, Amazon, and Alphabet. Though it's unlikely these in-house chips are going to outperform Nvidia's famed Hopper (H100) chip or successor Blackwell GPU architecture, they will be considerably cheaper than Nvidia's hardware and more readily available. In other words, the production of these internally developed chips will reduce the AI-GPU scarcity that's fueled Nvidia's otherworldly pricing power and juicy gross margin. In addition to a ramp up in internal competition, external competitors aren't sitting on their laurels. Advanced Micro Devices recently introduced its next-gen MI325X AI-GPU and is increasing production of its AI chip lineup. Broadcom CEO Hock Tan also anticipates demand for custom AI chips from its top hyperscale customers will meaningfully boost its artificial intelligence sales in the coming years. This all points to Nvidia's pricing power and gross margin weakening throughout the current calendar year. There are political uncertainties to consider, as well. In 2022 and 2023, the Biden administration clamped down on exports of high-powered AI chips and AI-related equipment to China. Meanwhile, President-elect Donald Trump has outlined plans to implement a 35% tariff on imports from China once he takes office on Jan. 20, 2025. Regulatory uncertainty threatens billions of dollars of quarterly sales that Nvidia receives from China. But perhaps the biggest concern of all is that history is undefeated when it comes to the evolution of game-changing technologies and innovations over the last three decades. Including the advent of the internet and its proliferation in the mid-1990s, there hasn't been a next-big-thing trend that's avoided a bubble-bursting event early in its expansion. The telltale sign that investors have, once again, overestimated the early stage adoption and/or utility of AI is precisely what Gil Luria referenced in his CNBC interview: a lack of clearly defined plans from businesses to generate a positive return on their AI investments. Without a significant expansion of real-world use cases that generate a positive return on investment, the door will be wide open for Nvidia to come up shy of investors' lofty expectations in 2025.

2 Key Reasons I'm Predicting Nvidia Stock Will Reach $200 in 2025 | The Motley Fool

Nvidia (NVDA -0.02%) is a leading supplier of networking hardware and chips for gaming, computing, robotics, and especially data centers, which is where most artificial intelligence (AI) development takes place. When Nvidia stock went public in 1999, the company had a market capitalization of around $500 million. It has grown to a staggering $3.5 trillion since then, with more than $3 trillion of that value created in the last two years alone, thanks to surging demand for its AI data center chips. Nvidia stock is trading at $144.47 as of this writing, but there are two reasons I think it could soar to $200 (or more) during 2025. If I'm right, it will value the company at almost $4.9 trillion, and translate into a 38% return for investors. Graphics processing units (GPUs) are more effective in AI workloads than traditional central processing units (CPUs). They are specifically designed for parallel processing, meaning they can handle several tasks at once without losing performance. This is key because AI development is extremely data intensive. Nvidia's flagship H100 GPU was built on its Hopper architecture, and it helped the company win 98% of the entire market for AI data center chips in 2023. It was superseded by the H200 GPU, which started shipping in mid-2024, and offered almost twice the performance. But in 2024, Nvidia revealed an entirely new architecture called Blackwell, which promises an even bigger leap in performance. The Blackwell-based GB200 NVL72 GPU system can perform AI inference a whopping 30 times faster than the equivalent H100 system. That performance is unleashed by Nvidia's fifth generation of NVLink networking technology, which allows GPUs to communicate with each other faster than ever. The GB200 NVL72 system is also 25 times more energy-efficient than the equivalent H100 infrastructure, which can save data center operators substantial amounts of money on electricity costs. Nvidia shipped 13,000 sample GB200 GPUs to customers during its fiscal 2025 third quarter (ended Oct. 31, 2024). Demand is significantly higher than supply right now, so sales are likely to ramp up very quickly. Morgan Stanley (which rates Nvidia stock as a top pick for 2025) forecasted that Nvidia would ship around 450,000 GB200 GPUs in the final three months of calendar 2024, followed by up to 800,000 in the first three months of 2025. Other analysts think Blackwell will scale a little more slowly, but they remain very optimistic about its potential this year. Blackwell revenue might even surpass Hopper revenue by April, which really highlights how fast Nvidia's business can transform. Nvidia's fiscal year 2025 will wrap up at the end of this month. It's on track to deliver a record $128.6 billion in total revenue, representing 112% growth compared to fiscal 2024. If recent quarters are anything to go by, around 88% of the company's total revenue for the year will come from the data center segment, led by GPU sales. That's a big shift from just three years ago in fiscal 2022, when the data center segment made up just 39% of its total business. Nvidia is operating with very high profit margins right now because GPU demand far exceeds supply, which gives the company pricing power. That's why its earnings per share more than tripled (year over year) over the last four quarters, to $2.62. Using that figure, Nvidia stock currently trades at a price-to-earnings (P/E) ratio of 56.8, which is actually a discount to its 10-year average of 58.9. In other words, despite surging more than 800% over the last two years alone, Nvidia stock might still be cheap. The picture is even more attractive when looking to the future. Wall Street's consensus forecast (provided by Yahoo) suggests that Nvidia could generate $4.43 in earnings per share during fiscal 2026 (which starts next month), placing the stock at a forward P/E ratio of just 32.6: That implies that Nvidia stock would have to soar by 80% over the next 12 months just to trade in line with its 10-year average P/E ratio, which translates into a price of $260! However, midway through this year, Wall Street will start looking ahead to Nvidia's potential results for fiscal 2027. If its incredible run of growth appears likely to stall, investors might hesitate to send the stock as high as $260. It's simply too early to know what will happen at this stage, especially because competition will almost certainly ramp up in the coming year. For now, I think $200 is a realistic target for Nvidia stock during calendar 2025. It implies a P/E ratio of 45.5 at the end of the year, assuming Wall Street's earnings forecast proves accurate. It's a big enough discount to the stock's 10-year average P/E that investors will probably still find it attractively valued.

Nvidia Stock Soars to Start 2025. Is It Too Late to Buy the Growth Stock? | The Motley Fool

Just a few trading days into the new year and Nvidia stock is already up sharply. As if its 171% gain in 2024 wasn't enough, shares of Nvidia (NVDA 2.02%) were already up about 9% by market close on Jan. 6. This was almost eight percentage points more than the S&P 500's year-to-date returns. Such staggering momentum probably has many investors wondering how long the stock can keep rising so rapidly. While there's no certain way to know how high the graphics processing unit (GPU) specialist's stock will go in the coming months, this doesn't stop investors from taking a moment to consider whether the stock looks attractive at its current level. After all, for investors who are considering buying and holding the stock for the long term, the short-term moves in the stock price are largely irrelevant. So, is Nvidia stock a buy at its current level? Or is the stock's current valuation already pricing in expected business growth? One thing is clear: Nvidia's business is firing on all cylinders. Revenue in its most recently reported quarter soared 94% year over year and 17% sequentially to $35.1 billion. This was driven primarily by 112% year-over-year growth in data center revenue, 88% of the quarter's total revenue. Data center revenue, of course, has been benefiting from the seemingly unstoppable demand for computing power to support artificial intelligence (AI) technology. "The age of AI is in full steam, propelling a global shift to NVIDIA computing," said Nvidia founder and CEO Jensen Huang in the company's fiscal third-quarter earnings call. The tailwinds for the technology are incredible, including enterprises adopting AI in droves to enhance workflows and even countries waking up to the fact that investment in AI is a mission-critical element to domestic technological infrastructure. This momentum is leading to impressive profitability. Nvidia's net income in the most recent quarter was $19.3 billion, more than double the $9.2 billion it reported in the year-ago quarter. Finally, this strong growth is creating a fortress of a balance sheet for Nvidia. The company boasts about $38.5 billion in cash, cash equivalents, and marketable securities, even as it ramps up spending on share repurchases. In the trailing nine-month period ended Oct. 27, 2024, it spent $26 billion on share repurchases. But here's where things get a little tricky. The rise in Nvidia's stock has put the company's market capitalization at nearly $3.7 trillion as of this writing. Its profits and cash balance, as impressive as they are in their own right, pale in comparison to this figure. Further, consider how this valuation measures up to Nvidia's trailing-12-month earnings. The company trades at 59 times earnings -- a multiple that prices in continued rapid growth in earnings not just over the next 12 months but for years to come. Of course, Nvidia will almost certainly continue growing at an impressive pace in 2025. The company's tailwinds are substantial and are unlikely to let up anytime soon. However, investors should keep in mind that the semiconductor industry is cyclical. Even more, it's intensely competitive. Case in point, chipmaker Intel (INTC -0.95%) once enjoyed dominance so great that it was difficult for anyone to imagine the company falling from grace. Yet shares are down 67% over the last five years as Nvidia and other chipmakers outmaneuvered Intel on almost every front. Further, technological change was just too rapid for the company to keep up. There's always a risk that the same thing could happen to Nvidia in the future. Though given Nvidia's dominance, it's unlikely it will have an Intel-like disastrous streak of poor execution anytime soon. The real risk to investors is likely one that is more subtle. For instance, if Nvidia's growth slows and profit margins narrow, investors could start questioning Nvidia's premium valuation and the stock could sell off sharply. Further, even the slightest hint that enterprise AI spending is close to peaking could cause the stock to take a hit. With all of this said, it may be worth staying on the sidelines when it comes to Nvidia stock. It's a great business, but a high valuation may have priced in much of the company's future growth.

Nvidia Stock Is Surging Today -- Is the AI Leader's Stock a Smart Buy for 2025? | The Motley Fool

Nvidia stock is climbing today following a fourth-quarter report from Foxconn (otherwise known as Hon Hai Precision Industry) that suggests demand continues to be very strong in the artificial intelligence (AI) hardware space. The graphics processing unit (GPU) leader's share price is also gaining ground thanks to excitement surrounding CEO Jensen Huang's keynote speech at the CES conference tonight. Foxconn published its fourth-quarter results before the market opened this morning, reporting record revenue. The tech manufacturing company said that strong demand for AI server hardware helped power impressive growth for its cloud-and-networking products segment. Nvidia is one of Foxconn's largest and most visible customers, and it's also the leading provider of GPUs used for AI servers, so it's reasonable to see the manufacturer's record sales results as a bullish indicator for the artificial intelligence leader. Investors are also looking forward to Huang's presentation at CES, scheduled to take place at 9:20 p.m. EST tonight. Nvidia has often used CES as an occasion to roll out and spotlight new products. While Huang's presentation will likely heavily feature consumer-facing products, including new graphics cards for gaming, it wouldn't be surprising to see him also spend some time discussing the company's upcoming, ultra-advanced GB300 AI processor or robotics initiatives. Nvidia stock has been on an incredible winning streak. With today's gains, the stock has officially hit a new high -- and the company's share price is up 208% over the last year alone. While the stock could see some volatile moves in the near term depending on whether what's shown at CES tonight lives up to expectations, the long-term outlook remains promising. Last Friday, Microsoft published a blog post that outlined plans to spend roughly $80 billion building out AI data centers in its 2025 fiscal year. For comparison, the software giant is projected to spend $53 billion in total on capital expenditures in 2024. Microsoft is Nvidia's largest customer, and Nvidia's GPUs are the fundamental hardware for training and running advanced AI applications. As Nvidia's largest customer, Microsoft's AI spending guidance is a very bullish indicator and suggests that the demand backdrop for high-end AI hardware remains very strong. With signs that investment in AI infrastructure is still in a relatively early stage of its long-term trajectory, Nvidia stock continues to look like a smart buy in 2025.

Where Will Nvidia Stock Be in 3 Years? | The Motley Fool

Nvidia (NVDA 4.45%) stock has made investors significantly richer in the past three years, turning an investment of $1,000 into more than $4,500 as of this writing. This is thanks to the 354% jump in the company's shares during this period, on account of its dominant position in the lucrative market for artificial intelligence (AI) chips. It is worth noting that shares of the chipmaker have handsomely outperformed the Nasdaq Composite's (NASDAQINDEX: ^IXIC) gains of 23% in the past three years. Nvidia's outstanding stock market returns have been powered by the terrific growth in its revenue and earnings, as customers and governments have been lining up to get their hands on its AI chips to train and deploy AI models. Now that we are at the beginning of 2025, it would be a good time to take a closer look at Nvidia's prospects for the next three years and see if this high-flying AI stock can continue delivering more upside to investors in the future as well. The size of Nvidia's business has grown immensely over the past three years. The company is on track to finish fiscal 2025 (which will end this month) with revenue of $128.6 billion (calculated by adding its fiscal Q4 revenue forecast of $37.5 billion to the $91.1 billion revenue it has generated in the first nine months of the year). For comparison, Nvidia ended fiscal year 2022 (which coincided with the majority of 2021) with $26.9 billion in revenue. So, the chipmaker's revenue is on track to increase at a compound annual growth rate (CAGR) of 68% during this three-year period. Investors may be wondering if Nvidia is capable of replicating such stunning revenue growth over the next three years as well. A 68% CAGR over the next three years would bring Nvidia's top line to almost $610 billion by the end of fiscal 2028. While that figure may seem extremely ambitious at first, investors should note that Nvidia has a huge addressable market opportunity that could indeed allow it to get closer to that figure. For instance, the company sees a $1 trillion revenue opportunity in the data center market alone. CEO Jensen Huang points out that "every single data center will have GPUs" in the future to enable accelerated computing, which is done through specialized hardware such as graphics cards that Nvidia sells to perform more work in less time. As a result, accelerated computing enables users to get more done while consuming less energy, which is why it is expected to play a central role in keeping data center power consumption in check in the long run. Moreover, the construction of new data center capacity is going to be another long-term tailwind for Nvidia. McKinsey, for example, estimates that global data center capacity could jump at an annual rate of 19% to 22% through 2030 to support the booming demand for generative AI. All this indicates that Nvidia's data center business still has a lot of room for growth, considering that the company is on track to end fiscal 2025 with just under $100 billion in revenue from this segment. The $1 trillion opportunity suggested by Nvidia indicates that it has scratched just 10% of the opportunity on offer in this space. Moreover, the company is the leading player in the data center GPU market, with a market share of more than 85%, indicating that the growing adoption of accelerated computing could significantly lift Nvidia's data center revenue over the next three years. The good part is that Nvidia's growth opportunity isn't limited to just data centers. The company's GPUs are also being used for other purposes as well, such as creating digital twins for industrial applications, powering gaming and AI personal computers (PCs), and in automotive and robotics. Nvidia reported robust growth in these three segments last quarter, generating combined revenue of $4.2 billion. That was a 20% jump over the prior-year period. These segments should continue to be tailwinds for Nvidia. The gaming GPU market, for instance, is expected to add $49 billion in revenue between 2023 and 2028, growing at a CAGR of 21% during this period, as per TechNavio. Nvidia is the top player in gaming GPUs, with a market share of 90%, according to Jon Peddie Research. This puts the company in a nice position to make the most of the incremental growth opportunity in this space. Meanwhile, the digital twin market is expected to generate $110 billion in revenue in 2028, as compared to $10 billion in 2023. Nvidia's GPUs support the growth of this market, as they are used for creating virtual models of factories and also for automating workflows in factories to enable higher operating efficiency. Multiple companies such as Foxconn, Reliance, Toyota, and others are using digital twins in their business operations by deploying Nvidia's GPUs. All this indicates that Nvidia's multiple growth drivers could indeed help it sustain its impressive growth over the next three years. We have seen that Nvidia is indeed capable of sustaining its outstanding revenue growth rate over the next three years. However, to estimate the stock's potential upside, we are going to rely on consensus estimates from YCharts. As the chart shows us, Nvidia's earnings are expected to grow from $2.95 per share in fiscal 2025 to $5.59 in fiscal 2027. That points toward an annual earnings growth rate of 37% for the next two years. If we take a conservative view and estimate that Nvidia's earnings grow even 30% in fiscal 2028, its bottom line could hit $7.27 per share. If we multiply the projected earnings after three years with the Nasdaq-100's earnings multiple of 33 (using the index as a proxy for tech stocks), its stock price could hit $240. That points toward 79% gains from current levels over the next three years. Given that Nvidia is trading at 32 times forward earnings right now, investors are getting a good deal on this AI stock, indicating that they can still consider buying it, as it seems to have room for more upside going forward.

Prediction: This 1 Artificial Intelligence Development Will Be a Once-in-a-Generation Opportunity for Nvidia | The Motley Fool

Nvidia (NVDA -6.22%) already has soared in the first stages of the artificial intelligence (AI) story. The company designs the most sought-after graphic processing units (GPUs), or chips that power crucial AI tasks, like the training and inferencing of models. Nvidia's GPUs take the No. 1 spot in the industry because they're the fastest around, helping customers save time and, eventually, money. Thanks to this position, Nvidia has generated double-digit and triple-digit growth in recent quarters, with revenue reaching record levels. And it's resulted in great gains for the shares -- the stock soared 171% last year after already rising 238% in 2023. After this fantastic performance, though, some investors may wonder if there's much growth potential left for Nvidia. My prediction is that Nvidia's AI success might just be getting started, and one AI development, in particular, which is taking shape right now will represent a once-in-a-generation opportunity for the tech giant. This could lead to major growth in earnings and share price over the long term. Below, I'll take a closer look at this potential billion-dollar growth driver. First, here's a quick summary of Nvidia's path so far. Several years ago, the company's GPUs were most known for powering the lively graphics in video games -- and they still do, generating more than $3 billion in revenue from this industry in the recent quarter. But the ability of these chips to process many tasks at once made them ideal for other uses and industries, too, particularly AI. In recent years, AI has become Nvidia's biggest business, bringing in a record $30 billion in revenue in the latest quarter. Nvidia hasn't stuck to just GPUs. It's built an AI empire, offering software, networking tools, and other elements to make itself the go-to place for all that is AI. This is a wise choice, considering analysts forecast today's $200 billion AI market may reach more than $1 trillion by the end of the decade. It's also important to keep in mind that Nvidia is ensuring its leadership in the AI world by a commitment to innovation. The company has pledged to update its GPUs on an annual basis and make its new innovations compatible with earlier ones. This way, customers can build on the Nvidia systems they already have, rather than starting from scratch with each new GPU release, for example. Let's move on to my prediction. One AI development, in particular, could represent a once-in-a-generation opportunity for Nvidia, and this is the creation of agentic AI. These AI agents, rather than answering one simple question, have the ability to tackle complex problems. They gather data from various sources, and powered by a large language model (LLM), "reason" to find a solution. Then, the AI agent will carry out the particular task. These agents even get better and better as time goes by because data from each interaction is fed back into them. Nvidia plays a key role in the business of agentic AI, offering developers tools to build and deploy such agents. The company has worked with partners to create blueprints for developers that integrate with Nvidia's Enterprise software platform -- Nvidia spoke of five blueprints during the CES this week in Las Vegas. The AI giant also announced its own AI blueprint for video summarization, allowing developers to create agents that can analyze huge quantities of video content. In an industrial setting, a video analysis AI agent could help increase productivity or improve safety -- to mention just a couple of uses. And in sports, this AI agent could help pro athletes better assess their performances and make improvements. This sounds great -- but why will agentic AI represent a once-in-a-generation opportunity for Nvidia? As mentioned, the tech giant already plays the leading role in the powering of AI. Now, with agentic AI, Nvidia gets to play a big role in the general use of AI, and this might represent major growth considering the many ways AI agents could serve companies and industries. Nvidia CEO Jensen Huang even said the opportunity for AI agents will be "gigantic," according to a report in VentureBeat last year. Designing tools needed to build these agents could be a significant opportunity for Nvidia -- and one that doesn't come around often. Some numbers support the idea, too. About 25% of companies using generative AI will launch AI agent pilots this year, and that will increase to 50% by 2027, Deloitte forecasts. At a compound annual growth rate of 19%, the agentic AI market is expected to reach more than $48 billion by 2032, according to DataIntelo. Now that companies are starting to put AI to use, agentic AI may gain momentum. As this happens, Nvidia should be one of the first to benefit. My prediction is, even after Nvidia's gains over the past two years, the company's growth may be far from over. That makes right now a fantastic time to buy and hold onto Nvidia stock.

Prediction: Nvidia Will Beat the Market. Here's Why. | The Motley Fool

Beating the market isn't a new feat for Nvidia (NVDA 4.45%). The artificial intelligence (AI) chip giant did this over the past two years, soaring more than 170% in 2024 and 238% in 2023 -- that's compared to double-digit gains for the S&P 500 in each of these years. Why such an explosive performance? Nvidia has risen to the top in AI, possibly the area of technology with the greatest growth potential ahead. Analysts expect today's $200 billion AI market to reach more than $1 trillion by the end of the decade, and Nvidia is well-positioned to benefit. Nvidia already has offered us proof of its ability to win as companies invest in AI. The chip designer's earnings have climbed in the triple digits during most of the recent quarters, reaching record levels. And this is why investors have piled into Nvidia, helping the stock to skyrocket. Of course, after such a performance, some investors now worry that Nvidia may take a pause or even decline in the new year. But I predict just the opposite. My prediction is Nvidia is likely to beat the market again -- and here's why. First, though, let's consider the Nvidia story so far, to understand why this company's growth is far from over. Nvidia designs graphics processing units (GPUs), the chips powering many crucial AI tasks such as the training and inferencing of models. The reason so many customers flock to Nvidia is because the company's GPUs are the fastest out there, helping customers more efficiently complete their projects. In fact, Nvidia says its GPUs -- which are more expensive than rival chips -- actually are more economical for customers over the long run because of the gains in efficiency. Nvidia hasn't stopped at GPUs, and instead, has built a complete AI empire, offering everything from networking options to enterprise software. And potential customers can easily find these products and services as they're available on all public clouds. All of this has helped Nvidia report record revenue quarter after quarter, as mentioned above. In the most recent period, the company's revenue soared to more than $35 billion. Importantly, Nvidia also is highly profitable on sales, steadily generating a gross margin of more than 70%. Now, let's consider my prediction. Though some say Nvidia may not continue galloping higher, I'm optimistic about stock performance to come. Nvidia could beat the market again this year -- and for one particular reason. The company is launching a major and much-awaited new product this quarter -- the Blackwell architecture -- and expects it to immediately add billions of dollars to revenue. Blackwell is a customizable platform with seven different chips, several networking options, and many other features that make it a game-changer for users. The world's major tech companies have been lining up to get on board, and some already have received Blackwell and proudly posted about it on social media. For example, this fall, Microsoft's Azure said it was the first cloud to run Blackwell. Nvidia is ramping production of Blackwell in this current quarter -- the fiscal fourth quarter -- and expects several billions of dollars in Blackwell revenue during the period. And since demand has surpassed supply, we should expect Blackwell revenue growth for many quarters to come. At the same time, Nvidia has pledged to maintain gross margin above 70% even during early launch days, when costs often weigh more heavily on earnings. So, the Blackwell launch and the revenue boost to come should result in ongoing excitement about the stock in the investment community -- and that could push the shares higher. And if Nvidia is able to maintain gross margin as planned, that should add to investor confidence about the earnings picture moving forward. It's also important to note that Nvidia has committed to annual updates to its GPUs, something that should keep it ahead of rivals. Today, Nvidia trades for 46x forward earnings estimates. This isn't cheap, but it's reasonable for a company with such an earnings track record, potential for more growth ahead, and leadership in a market that could reach $1 trillion in just a few years. All of this means that even though Nvidia has soared in recent times, this bright growth story could continue -- and Nvidia could be heading for another market-beating year.

This Artificial Intelligence (AI) Company Gained $2 Trillion in Value Last Year, and Wall Street Thinks It Could Be Headed Much Higher in 2025 | The Motley Fool

Nvidia gained $2 trillion in value during 2024 and is now one of the biggest companies in the world by market cap. This past year was another terrific one for technology stocks in particular. Tailwinds driven by artificial intelligence (AI) helped push the S&P 500 higher by 23%, while the Nasdaq Composite gained an impressive 29%. The "Magnificent Seven" stocks were among the year's top gainers in the market, and perhaps no other garnered more attention than semiconductor leader Nvidia -- which was the top-performing stock in the Dow Jones Industrial Average in 2024. Last year, Nvidia gained approximately $2.1 trillion in market capitalization -- the highest of any company. This propelled Nvidia to become one of the world's most valuable businesses. While Nvidia's current run could suggest that the stock is due for a pullback, Wedbush Securities technology analyst Dan Ives is calling for significantly more growth ahead for the AI darling -- and I agree. Let's look at Nvidia's latest catalysts and make the case for why 2025 could be another one for the record books. Over the last two years, Nvidia has emerged as the leader of the pack in the AI marathon, and it all boils down to one thing: graphics processing units (GPUs). GPUs are advanced chipsets necessary for developing generative AI applications. Nvidia's deep roster of GPUs has helped the company separate from competitors such as Advanced Micro Devices, and acquire an estimated 90% of the GPU market. To add some context here, Nvidia's dominance has fueled consistent revenue and profit growth for the company -- allowing it to double down on research and development (R&D) and pioneer even newer, innovative products. Enter Blackwell, Nvidia's next-generation GPU architecture, which is reportedly already sold out for the next 12 months. While this is more of a company-specific tailwind, Ives believes that broader investments in AI infrastructure could eclipse $1 trillion in the coming years. Nvidia is taking advantage of this windfall of rising capital expenditure (capex), underscored by investments in European GPU cluster specialist Nebius, and the acquisition of AI infrastructure business Run:ai (which it acquired for a reported $700 million). Given the massive rise in Nvidia's stock price, it's a prudent idea to look at some of the company's valuation metrics and cross-reference them against the catalysts I've covered above. Data source: YCharts. On the surface, the valuation multiples above may give the illusion that Nvidia is a pricey stock. But when you consider that the company's P/E and P/FCF are materially lower today than they were a year ago, Nvidia's valuation profile looks pretty compelling. Essentially, the company's profits are accelerating at a faster rate than the company's value (price, or market cap), and therefore Nvidia's valuation actually could be seen as quite reasonable. Furthermore, a PEG ratio of 1 implies that Nvidia is fairly valued right now. I think it's quite difficult to forecast what Nvidia's earnings profile could look like over the next several years as Blackwell and the company's peripheral investments begin to bear fruit. Not only do I see Nvidia as a screaming buy right now, I think the company could be the first to enter exclusive territory in 2025: The $4 trillion club. I am excited for how Nvidia will perform this year, and I think the stock is a compelling buying opportunity right now for AI and growth investors alike.

Should You Buy Nvidia Stock as CES 2025 Gets Underway? | The Motley Fool

All eyes were on Nvidia (NVDA -0.27%) CEO Jensen Huang on Wednesday as he delivered his keynote speech at the 2025 CES in Las Vegas. The address was filled with several exciting announcements and it included some valuable insights from one of the foremost tech leaders, including some general discussion on artificial intelligence (AI) as well as how AI might affect Nvidia over the next few years. The CES event helped show the investing world that there is still much to come from Nvidia and the AI industry as a whole. With all of the incredible growth already seen over the last few years, it wouldn't be surprising to hear speculation about how much further the technology can go. If Huang's comments on Wednesday are to be believed, the answer is a whole lot further. That bodes well for Nvidia shareholders. Nvidia's focus of late has been dominated by data centers and AI models, but the heart of the company has traditionally been consumer graphics. The company was founded to help make graphic-intensive video games possible on personal computers and in a nod to this history (and the fact that CES got its start as the consumer electronics show) the first big announcement came in the unveiling of Nvidia's newest line of RTX GPUs and their price points. The newest line, based on Nvidia's new Blackwell architecture (which also powers its AI chips), should at least double the performance standards of its current lineup, depending on the model chosen. That's a significant upgrade considering its current generation is already among the best on the market. Huang spoke about the integration of AI into computer graphics and how these performance increases were possible only because of AI-specific technology. Time will tell how they stack up in real-world testing once they are released, but Huang and Nvidia have a history of delivering on their claims. Huang took the opportunity to address what he called the next wave of AI, agentic AI. Where current generative AI excels at creating -- text, music, even video -- it cannot do all that much. That is, it can't complete multistep, multivariable tasks on behalf of the user. That is exactly what agentic AI does. As has been Nvidia's primary model in the past, the company won't be designing AI agents to be used directly by consumers or clients, but rather the building blocks that allow them to be developed and implemented using the Nvidia ecosystem. This allows Nvidia to focus on improving the underlying technology rather than worry about optimizing its use for specific applications. The model has been extremely successful in the past and it would seem it will be here, too. While agentic AI can be very effective, it is confined to the digital realm. Its application in the real world is the ultimate goal for Nvidia, according to Huang. This marriage of robotics, AI, and advanced sensory equipment could have massive economic implications. Think of the impact of truly self-diving vehicles or robotic assistants that can run errands for you. This ultimate goal requires significant advancements in technology. A whole lot of training needs to take place. Traditionally, this training mostly comes in the real world. How else would you get the data? Now, Nvidia says it has the solution: Nvidia Cosmos. This "world foundation model" uses AI to synthesize real-world environmental data that can be used to train AI intended for use in the real world. This could dramatically reduce the costs and time involved in training and testing robotics and greatly increase their success once placed in physical environments. Huang's presentation certainly had a wow factor to it. It was designed to drum up excitement for the year ahead. Some of the specific claims and predictions may not come to fruition in 2025, but there was plenty of substance in the presentation, too. The important parts of the Blackwell rollout, the maturation of agentic AI, and other comments all point to a strong year ahead for the company. They should all help the stock continue to outperform the market and add to the case for buying Nvidia.

The Ultimate Guide to Investing in Nvidia for Maximum Returns | The Motley Fool

The AI chipmaker's stock might seem too hot to handle, unless you follow these rules. Nvidia (NVDA -6.22%) has been one of the greatest growth stocks in recent history. Over the past decade, the chipmaker's share price (adjusted for splits) soared by 28,610%. That would have turned a modest $1,000 investment into about $287,100. That dazzling growth was initially driven by brisk sales of Nvidia's graphics processing units (GPUs) for video games, as well as to support professional visualization software and cryptocurrency mining. But over the past few years, sales of high-end data center GPUs for processing artificial intelligence (AI) tasks have eclipsed its sales of chips for other uses and become the company's primary growth engine. From fiscal 2014 to fiscal 2024 (which ended in January 2024), Nvidia's revenue grew at a compound annual growth rate (CAGR) of 31% as its net income rose at a CAGR of 52%. From fiscal 2024 to fiscal 2027, analysts expect its revenue and net income to grow at CAGRs of 57% and 65%, respectively, as the AI market continues to expand. Based on those rosy expectations, Nvidia's stock still looks reasonably valued at 34 times forward earnings. But before you start a new position in this chipmaker, you should review these strategies which could help you maximize your long-term returns. The bull thesis for Nvidia is easy to understand, but investors should recognize the longer-term challenges. Nvidia generated 88% of its revenue from its data center chips in its latest reported quarter, which makes it a pure bet on the secular growth of the AI market. If that expansion slows down, Nvidia's sales growth could abruptly stall out. Nvidia could also face more intense competition in that space. It accounted for 98% of all data center GPU shipments worldwide in 2023, according to TechInsights, but Advacned Micro Devices could gradually gain more ground with its lower-cost Instinct GPUs. Many of Nvidia's top hyperscale data center customers -- including Microsoft, Amazon, and Alphabet -- are also developing their own AI accelerator chips. Trade restrictions for AI chips could also throttle its growth. Nvidia's sales of data center GPUs to China have already been curbed by export bans, and it could face antitrust charges as it continues to monopolize the high-end data center GPU market. Nvidia's stock has already been volatile, and the challenges ahead -- which could include some steep and protracted drawdowns -- could shake out a lot of investors. To offset how such volatility might impact you over the long term, follow a strategy of dollar-cost averaging, which is the practice of buying set dollar amounts of a stock at regular intervals regardless of its trading price. For example, you might commit to investing $1,000 in Nvidia on the first trading day of every month. If its shares are trading lower, that sum will buy more shares. If they're trading higher, it will buy fewer shares. Over a stretch of multiple years, those incremental purchases will dilute your overall risk and even out your long-term returns. It's a strategy that generally works well with more volatile investments. Many investors sold shares of Nvidia over the past decade, and looking back, many would likely feel they did so prematurely. Though it doubtless seemed prudent to them to take profits on an investment that had massively rallied, patiently sticking with Nvidia and doing nothing would have been the smarter move. As Warren Buffett's mentor Benjamin Graham once said, the "investor's chief problem -- and even his worst enemy -- is likely to be himself." So to prevent yourself from becoming your own worst enemy and selling your shares of Nvidia too early, you should lock them up in a traditional or Roth IRA. If you're under the age of 50, you can contribute up to $7,000 per year into both types of IRAs, but you can't withdraw those funds without incurring penalties and taxes before the age of 59 1/2. While you can still buy and sell your shares of Nvidia within an IRA, the inability to withdraw those funds until you're much older might prevent you from impulsively taking profits. So by contributing $7,000 per year to an IRA, using those funds to purchase shares of Nvidia on an annual basis, and not selling those shares until you can withdraw those funds without any penalties should keep you on a disciplined path of dollar-cost averaging while maximizing your long-term returns. Investors should buy and hold Nvidia for the long term if they expect the company to maintain its lead in the booming AI hardware market. But they shouldn't blindly stick with the stock and ignore its earnings reports and evolving market challenges. If the bull thesis for this chip giant is eventually disrupted, investors should still be ready to sell the stock to lock in their profits.

Nvidia gains 3%: Why it can climb to $190 soon

Nvidia saw a 3% increase on Wednesday, driven by renewed optimism from BofA, placing it at the top of the Street's 2025 Semiconductor Top Picks. As of the latest data, BofA holds approximately 2.70% of its portfolio in NVDA stock. BofA analysts maintained a "Buy" rating for NVIDIA with a price target of $190, citing the company's dominant position in artificial intelligence, gaming, and data centers. The artificial intelligence (AI) boom has propelled chipmaker Nvidia to become 2024's largest global gainer in market capitalization, reaching a value of $3.28 trillion by the end of the year, according to Reuters. Nvidia's market valuation significantly increased from $1.2 trillion at the end of 2023, driven largely by demand for its AI chips. Nvidia is now the second-most valuable publicly listed company globally, following Apple, which neared a $4 trillion valuation as investors anticipated benefits from its AI enhancements. Other top companies in market value for 2024 included Microsoft at $3.1 trillion, and both Alphabet and Amazon, each around $2.3 trillion. The AI boom has contributed to remarkable growth in the technology sector, with companies across various domains reporting substantial revenue increases and attracting considerable investment. A report from HSBC Innovation Banking noted a significant shift in U.S. venture capital towards AI firms, with the funding for AI companies approaching levels allocated to the rest of the venture market. HSBC U.S. Innovation Banking Head Dave Sabow commented on the unprecedented consolidation within the AI sector, stating, "Venture capital has always gravitated toward transformative industries, but the level of consolidation we're seeing within one category is unprecedented." Throughout 2024, Nvidia solidified its lead in the AI market by introducing new hardware and tools, including the Blackwell B100 and B200 GPUs, which enhanced generative AI capabilities. Additionally, Nvidia launched the $249 Jetson Orin Nano Super Developer Kit, aimed at enabling smaller companies to access AI development. The company also formed numerous partnerships across key sectors. Nvidia's Blackwell GPUs are so hot, they could bake a cake Nvidia CEO Jensen Huang remarked in November that the trends in AI services are "really just beginning," predicting sustained growth and modernization that would create new industry opportunities for several years. Nvidia's current trajectory indicates strong performance ahead of significant events like CES 2025. The company has already achieved a market cap exceeding $3.4 trillion, primarily due to its foundational role in the ongoing AI boom. Major companies such as OpenAI and Meta have heavily invested in Nvidia's processors, a trend expected to continue into 2025. On January 6, 2025, Jensen Huang will deliver the opening keynote at CES, where he is anticipated to announce the highly anticipated RTX 5000 series GPU and discuss various topics related to AI, robotics, and automotive applications. Analysts tracking Nvidia have expressed considerable optimism, with 20 out of 21 maintaining a "buy" or equivalent rating. Bank of America and others have distinguished Nvidia as a top semiconductor pick for 2025. Following a remarkable performance in 2024, where Nvidia stock surged approximately 170%, analysts are particularly focused on the demand for Blackwell GPUs, utilized in generative AI processes. Citi analysts expect Nvidia to raise sales expectations for Blackwell due to increased demand for AI-driven solutions in sectors like warehouse operations and manufacturing.

Is Nvidia Stock a Buy Now?

To say that Nvidia (NVDA 3.43%) has been a darling for the investment community would be putting it very mildly. This business crushed it for investors, as shares have climbed an unbelievable 2,447% in the past five years, propelled lately by a monster 171% gain just in 2024. This top artificial intelligence (AI) stock trades close to its all-time high, as of this writing. After such an incredible run, should you still consider buying Nvidia right now? Demand is off the charts Nvidia sells graphics processing units (GPUs) that provide computing power for various uses. More than two decades ago, the main function was to support PC gaming. But what has put the business on the map in recent years has been its GPUs that enable training AI models in massive data centers, now representing the bulk of the chipmaker's sales. The particular desire for companies across the board to develop, invest in, and offer their own customers various AI-related services results in a direct benefit for Nvidia because it commands a monopolistic position in the market for AI chips. The company can essentially be viewed as the top pick-and-shovel investment in the AI space. Demand has been off the charts. The recently launched Blackwell architecture is seeing tremendous interest from customers. "Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand customers are placing on us," Chief Financial Officer Colette M. Kress said on the company's fiscal 2025 third-quarter earnings call. Revenue in the latest fiscal quarter surged 94% year over year. And Wall Street analysts expect sales to jump 72% in the fourth quarter. It's also worth pointing out that the business is extremely profitable, posting a fantastic 62% operating margin in the fourth quarter. Nvidia's risk factors If you're considering buying shares, the company's fundamental momentum is hard to ignore. But you must look at the valuation. The stock trades at a price-to-earnings ratio (P/E) of 56.9, which is a 77% premium to the tech-heavy Nasdaq 100 index. The business' remarkable growth and profitability might warrant a high valuation, but it's definitely still elevated. And investors should be mindful of downside factors. Perhaps the most notable risk facing Nvidia comes from its own customer base, due to concentration with the top four representing 53% of accounts receivable as of Oct. 27. It's believed that this roster may include Meta Platforms, Microsoft, Amazon, and Alphabet. All are developing their own AI chips in an effort to bring this costly endeavor in-house, a smart strategy given the billions of dollars they all are investing to boost their AI capabilities. The long-term result could be softer demand for Nvidia as these deep-pocketed tech giants move to vertically integrate their supply chains. We could also witness the bursting of the AI bubble. Investors seem to always overestimate what new technologies can do in the short run, bidding up asset prices and prompting corporate executives to direct resources to avoid being behind the trend. But these AI models are extremely expensive to operate, users still find errors when working with them, and there could be a limit to their performance as the available unused data in the world grows smaller. Nonetheless, AI is hyped as a solution to a lot of problems, which isn't a certainty. Tread with caution It's extremely difficult to argue with what Nvidia has been able to accomplish, quickly rising up the ranks to become one of the world's most valuable enterprises as it put itself at the forefront of the AI boom. This has undoubtedly made the company a winning choice among investors, who have made boatloads of money owning the stock. However, I always struggle to recommend purchasing shares of a business when optimism, excitement, and greed are running high, as these things can be unsustainable. It's also best not to ignore the key risks of valuation, customers working to move upstream, and the chance of the AI bubble bursting. Taking everything together, I don't believe Nvidia is a smart buy right now.

Why Nvidia Stock Rallied to a Record High Monday Morning | The Motley Fool

There were a couple of developments that sent the artificial intelligence (AI) chipmaker higher, as shareholders eagerly await an update from the company's rock star CEO. CES is one of the biggest tech-focused events in the world. The annual trade show brings together many of the latest developments in technology and features some of the industry's biggest names. Nvidia CEO Jensen Huang is scheduled to kick off the event Monday evening by delivering the highly anticipated keynote address. Huang is expected to provide insight into the state of AI adoption and demand for Nvidia's recently released Blackwell processors, and potentially provide details about its upcoming Rubin platform. There are also rumors Huang could announce the development of an AI-centric CPU. Excitement about Huang's appearance notwithstanding, Nvidia shareholders had other reasons to be enthusiastic. Global electronics company Hon Hai Precision Industry, more commonly referred to as Foxconn, announced yesterday that robust demand for AI-centric servers fueled record fourth-quarter results and management expects its growth spurt to continue into the first quarter. Nvidia supplies Foxconn with many of the graphics processing units (GPUs) used to power AI in its cloud and networking devices, which bodes well for the chipmaker. The evidence suggests that the adoption of AI is still in the early stages and Nvidia is a pivotal player in the space. It might seem expensive at 59 times earnings, but looking ahead, Nvidia is selling for just 34 times next year's expected earnings, a much more palatable multiple. Furthermore, for the past 10 years, Nvidia has traded for 59 times earnings on average, which suggests that the stock isn't really that expensive from a historical perspective. The AI market is expected to be worth as much as $15.7 trillion by 2030, according to Big Four accounting firm PwC, which also suggests that "AI is still at a very early stage." Given its critical role in the advances in AI, I'd say that makes Nvidia stock a buy.

NVIDIA Is Still the Most Important Stock in the Market

NVIDIA (NASDAQ: NVDA) is still the most important stock after two-plus years of dominating the stock market. Its GPU technology unlocked the door to AI, and now NVIDIA is capitalizing on it using a full-stack method. The CUDA framework is central to the advances that now include a new platform for robotics, universal architecture for robotics, and AI for PCs. The technology includes advances in the RTX line, the DRIVE platform, and DIGITS, a program putting AI into PCs, the end-game for AI. Data centers rule the AI world now, but eventually, that technology will fit into the palm of your hand; NVIDIA is well-positioned to do it. Demand for its semiconductor products, including the now-in-full-production Blackwell, will remain high between then and now. Among the critical details is the push into autonomous driving. The company revealed the DRIVE Hyperion AV platform, an end-to-end solution for autonomous driving built on the Thor AGX SoC. The platform and other AV/robotic advances, including computer vision, are already being used by companies like Uber (NYSE: UBER) and Toyota (NYSE: TM). Toyota inked a partnership with NVIDIA to develop next-gen autonomous vehicles, opening the door to expanding revenue streams and threatening companies like Tesla (NASDAQ: TSLA). Tesla CEO Elon Musk is banking on a company evolution centered on autonomous driving and Cybercabs that NVIDIA may disrupt. Other companies at risk from these developments include Advanced Micro Devices (NASDAQ: AMD) and Ambarella (NASDAQ: AMBA), which have stakes in AI-for-PCs and computer vision. The initial analysts' response to the news is good. MarketBeat tracked commentary from two major firms within the first few hours of the CES keynote address. Those are a reiterated rating and price target from Benchmark and comments from Wedbush analyst Dan Ives, who says he is more bullish than ever. He believes NVIDIA is building on its enormous technological lead, expanding into new verticals, and opening the door to a $5 trillion valuation that could be reached within 18 months. That's a potential gain of 65% in market cap in under two years for a company that has ballooned in size over the last two. In this scenario, the Magnificent Seven will become just NVIDIA, the most valuable company on the planet. The reiterated price target from Benchmark aligns with the revision trend, increasing the consensus price target over time. In early January, the consensus was near $165, a gain of 10% from critical resistance targets, while the high-end range added another 2000 basis points to it. The sentiment trend will likely strengthen over the next few months, so the high-end range and consensus target will continue rising and add lift to the market this year. Reasons to believe the estimates will continue rising include the slate of new products expected to hit the market in Q1 and the ongoing expansion of data center capacity globally. The consensus outlook for NVIDIA results is robust. The analysts expect growth to slow in Q4 and again in F202,6, but this is due to the law of large numbers. The company will grow revenue by 72% or more in Q4 and 50% in 2025, down from the triple-digit pace set last year and the 80% growth in the previous quarter, but the dollar value is important today. The 50% gain in 2025 is worth 400% of the 2021 revenue in dollars, with full-year 2025 revenue equal to nearly 12x the 2021 take. The higher revenue levels are sustainable. The surge in revenue drives a higher margin and cash flow, as seen in the balance sheet details. The company's cash hoard grew by 50% to over $38 billion, leaving it in a net-cash position relative to total liability and capable of sustaining and increasing its capital return. NVIDIA's stock price reacted favorably to the news, gaining over 2% in early pre-market trading. The move aligned the market with an all-time high, with bullish indicators and market tailwinds supporting it. The all-time high is the critical resistance point; a move above it will lead to another rally that could be strong. FOMO, or fear of missing out, is possible given the market state and improving outlook for NVIDIA's revenue and earnings.

Better Buy in 2025: Nvidia Stock or Bitcoin? | The Motley Fool

Nvidia has a market capitalization of $3.5 trillion, making it the world's largest semiconductor company by a country mile. It's the leading supplier of data center chips used to process artificial intelligence (AI) workloads, and sales are booming right now. Bitcoin has a market capitalization of almost $2 trillion, making it the world's largest cryptocurrency by a wide margin. Nvidia stock soared by 171% in 2024, and Bitcoin was up by 120%. Both ended the year near record highs. But 2025 has arrived, and it's time for investors to look forward, so which one is the better buy for this year? Nvidia's H100 graphics processing unit (GPU) was the most popular data center chip in the world for AI development in 2023, helping the company win 98% of the entire market. It then launched the more powerful H200 GPU during 2024, and it also started shipping an entirely new generation of chips built on its Blackwell architecture toward the end of the year. The Blackwell-based GB200 NVL72 GPU system is capable of performing AI inference (using live data to make predictions) at 30 times the pace of the equivalent H100 system. Each GB200 GPU sells for about $83,000, which is twice the price of the H100, but the 30-fold increase in performance actually translates into substantial cost savings for developers. Simply put, Blackwell GPUs will make the most advanced AI models affordable for a wider group of businesses and developers. So it isn't surprising that Nvidia Chief Executive Officer Jensen Huang says demand is "staggering." The company shipped 13,000 sample GB200 GPUs during its recent fiscal 2025 third quarter (ended Oct. 28), but one estimate by Morgan Stanley suggests it could ship 800,000 during the first three months of calendar 2025 alone. In a separate forecast, Morgan Stanley also said four tech companies -- Microsoft, Amazon, Alphabet, and Meta Platforms -- could spend a combined $300 billion on AI infrastructure and chips during 2025. As the market leader in AI chips, much of that money will likely flow to Nvidia. Its fiscal year 2025 will wrap up at the end of this month, and the company is on track to deliver a record $128.6 billion in total revenue, led by GPU sales. That would represent growth of 111% compared to fiscal 2023. Wall Street's average forecast (provided by Yahoo!) suggests the chipmaker's revenue will then approach $200 billion in fiscal 2026 (which will occupy most of calendar year 2025). By all accounts, the next 12 months will be huge for Nvidia. But would you believe me if I told you its stock still looks cheap? More on that in a moment. Bitcoin recently crossed a historic price milestone of $100,000, and as I mentioned earlier, it currently has a market cap of almost $2 trillion. The next-most valuable cryptocurrency is Ethereum, with a market cap of just $422 billion, which really highlights Bitcoin's dominance. Why is it so popular? Truth be told, few cryptocurrencies have a true use case in the real world. They are mostly speculative assets that rise and fall on the whims of investors. But Bitcoin is unique because it's truly decentralized, meaning it isn't controlled by any company or person. It also has a fixed supply of 21 million coins, which adds an element of scarcity, especially because the total amount won't be fully mined until about the year 2140. Last year, the Securities and Exchange Commission (SEC) approved dozens of Bitcoin exchange-traded funds (ETFs). It became the first cryptocurrency to win the blessing of the U.S. regulator, while other crypto heavyweights remained under intense scrutiny, and its decentralized nature had a lot to do with it. ETFs allow financial advisors and institutions to own Bitcoin in a safe and regulated manner, which is great because many investors and analysts have embraced the cryptocurrency as a store of value, akin to a digital version of gold. The total value of all gold reserves currently stands at $17.9 trillion, so Bitcoin's market cap would have to soar by about 840% to catch up, implying a price per coin of $904,000. That might be a good long-term target for investors to shoot for. In the nearer term, Fundstrat Global Advisors analyst Tom Lee predicts Bitcoin could reach $250,000 in 2025. It could benefit from further interest rate cuts this year, which tend to drive investors into growth assets like stocks and cryptocurrencies. Plus, a new administration will take office this month, and it will feature several pro-crypto members, including the president himself. That could buoy demand for cryptocurrencies in general. There is a very important difference between a company like Nvidia, and a speculative asset like Bitcoin: Companies generate revenue and earnings, so it's easy to calculate their value. Nvidia generated $2.62 in earnings per share (EPS) during the past four quarters, giving its stock at a price-to-earnings ratio (P/E) of more than 56. That's a slight discount to its average P/E of about 59 during the past 10 years, so we can argue that the stock is somewhat cheap right now. Moreover, according to Wall Street's consensus forecast (provided by Yahoo!), the company could generate $4.43 in earnings per share during its fiscal year 2026 (which starts in February). That places its stock at a forward P/E of about 32, as represented by the orange line in the chart below: In other words, Nvidia stock would have to soar by 89% during the next 12 months just to trade in line with its 10-year average P/E of almost 59. Despite Bitcoin's status as the world's largest cryptocurrency, there isn't a concrete reason for it to move higher this year. I'm not saying it won't, I'm merely pointing out that it's impossible to forecast the price movements of a speculative asset. There isn't even a reliable way to calculate how much value Bitcoin could gain from a tailwind like favorable regulation under the new administration. Therefore, I think Nvidia stock is the better buy in 2025. Aside from its attractive valuation, AI could be the most powerful tech revolution in a generation, and it wouldn't be happening without Nvidia.

Nvidia's $2 Trillion AI Rally In 2024 Fueled by Chips, Startups, and Robotics - NVIDIA (NASDAQ:NVDA)

Nvidia plans humanoid robotics launch in 2025, boosting growth prospects. The artificial intelligence frenzy and demand for its AI-centric chips catapulted Nvidia Corp NVDA into the trillion-dollar market cap club for 2024. It lags behind Apple Inc AAPL, which was backed by investor curiosity over its potential AI offerings, turbocharging its iPhone sales. Reuters reports that Nvidia's valuation surged by over $2 trillion in 2024, reaching over $3 trillion, making it the second-most valuable public company. It owes its success to its GPUs, which were previously targeted at video games but ultimately transformed into critical hardware for developing AI models. Also Read: What's Going On With Taiwan Semiconductor Stock On Friday? According to the report, Nvidia invested $1 billion across 50 startup funding rounds in 2024 (versus $872 million in 2023), including Elon Musk's xAI. It also acquired multiple AI players, including Run:ai, Nebulon, and OctoAI. Nvidia eyes robotics as a growth catalyst amid rising AI competition. The chip designer plans to introduce Jetson Thor computers for humanoid robots in 2025, coinciding with Tesla Inc TSLA targeting the availability of its humanoid robot, Optimus, by 2026. Other trillion-dollar tech companies included Microsoft Corp MSFT, Google parent Alphabet Inc GOOGL GOOGL, and Amazon.Com Inc AMZN. Broadcom Inc AVGO entered the trillion-dollar club in 2024, backed by demand for its custom chips from the U.S. Big Tech giants. In 2024, a third of the ten global companies worth over $1 trillion came from the chip industry. These companies were instrumental in the S&P 500 and Nasdaq index's surge of 23% -- 29% in 2024, backed by investor and analyst enthusiasm despite Donald Trump's tariff threat and U.S. interest rate concerns. Daniel Ives of Wedbush told Reuters he expects tech stocks to post a 25% gain in 2025, citing favorable regulatory policies under Donald Trump, AI capital expenditures, and more. Nvidia stock surged 203% in the last 12 months. Investors can gain exposure to the stock through VanEck Semiconductor ETF SMH and Fidelity MSCI Information Technology Index ETF FTEC. Price Action: NVDA stock is up 4.28% at $144.23 at the last check Friday. Also Read: Alibaba Leverages Scale and Deep Pockets to Slash AI LLM Prices To Gain Market Share Photo courtesy of Nvidia Market News and Data brought to you by Benzinga APIs

Nvidia Surges as the Biggest Market Cap Gainer of 2024 Amid AI Boom

These tech giants played a pivotal role in bolstering global indexes in 2024. The S&P 500 index rose by 23.3%, while the Nasdaq surged by 28.6%, reflecting investor confidence in the tech sector. The strong performance underscores the sector's resilience and its central role in driving market growth. Despite geopolitical tensions between the United States and China and concerns over slower interest rate cuts, analysts remain optimistic about the tech sector's potential in 2025. Daniel Ives of Wedbush forecasts a 25% gain in tech stocks, attributing the growth to a favorable regulatory environment under the administration of Donald Trump, continued advancements in AI, and the stability of Big Tech. "We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI cap-ex over the next three years," Ives stated. The projection emphasizes the transformative impact of AI investments, which are expected to drive innovation and sustain the momentum of tech firms in the coming years. Nvidia's meteoric rise in market value highlights the profound influence of AI on the global economy. As companies like Nvidia, Apple, and Microsoft continue to dominate market rankings, their advancements in technology are reshaping industries and defining the future of innovation. With optimism surrounding AI and other technological breakthroughs, the tech sector is poised for another strong year in 2025, solidifying its position as a cornerstone of global economic growth.

Nvidia's market value gets $2 trillion boost in 2024 on AI rally

Jan 2 (Reuters) - Nvidia (NVDA.O), opens new tab emerged as the biggest global gainer in market capitalization for 2024, driven by surging interest in artificial intelligence and the robust demand for its AI-centric chips across various industries. The chipmaker's market value increased by over $2 trillion last year, reaching $3.28 trillion at the close of 2024, making it the second-most valuable listed company in the world. Its market value was $1.2 trillion at the end of 2023. Meanwhile, Apple (AAPL.O), opens new tab continued to lead global companies in market value, nearing a historic $4 trillion valuation. This surge was fuelled by investor enthusiasm for the company's anticipated AI enhancements, aimed at revitalizing sluggish iPhone sales. At the end of 2024, Microsoft (MSFT.O), opens new tab ranked third with a market value of $3.1 trillion, followed by Alphabet Inc (GOOGL.O), opens new tab and Amazon (AMZN.O), opens new tab, each valued at approximately $2.3 trillion. These tech companies significantly boosted their respective global indexes in 2024, with the S&P 500 index (.SPX), opens new tab surging 23.3% and the Nasdaq (.IXIC), opens new tab climbing 28.6%. Despite the shares' higher valuations, looming U.S.-China tariff tensions, and potentially slower U.S. interest rate cuts, analysts remain optimistic about the sustained strong performance by tech firms in 2025. Daniel Ives of Wedbush predicts a 25% gain in tech stocks in 2025, attributing potential growth to a less regulatory environment under Donald Trump, forthcoming strong AI initiatives, and a stable foundation for Big Tech and Tesla (TSLA.O), opens new tab in 2025 and beyond. "We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI cap-ex over the next 3 years," he said. Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Nvidia's market value gets $2 trillion boost in 2024 on AI rally

(Reuters) - Nvidia emerged as the biggest global gainer in market capitalization for 2024, driven by surging interest in artificial intelligence and the robust demand for its AI-centric chips across various industries. The chipmaker's market value increased by over $2 trillion last year, reaching $3.28 trillion at the close of 2024, making it the second-most valuable listed company in the world. Its market value was $1.2 trillion at the end of 2023. Meanwhile, Apple continued to lead global companies in market value, nearing a historic $4 trillion valuation. This surge was fuelled by investor enthusiasm for the company's anticipated AI enhancements, aimed at revitalizing sluggish iPhone sales. At the end of 2024, Microsoft ranked third with a market value of $3.1 trillion, followed by Alphabet Inc and Amazon, each valued at approximately $2.3 trillion. These tech companies significantly boosted their respective global indexes in 2024, with the S&P 500 index surging 23.3% and the Nasdaq climbing 28.6%. Despite the shares' higher valuations, looming U.S.-China tariff tensions, and potentially slower U.S. interest rate cuts, analysts remain optimistic about the sustained strong performance by tech firms in 2025. Daniel Ives of Wedbush predicts a 25% gain in tech stocks in 2025, attributing potential growth to a less regulatory environment under Donald Trump, forthcoming strong AI initiatives, and a stable foundation for Big Tech and Tesla in 2025 and beyond. "We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI cap-ex over the next 3 years," he said. (Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Mrigank Dhaniwala)

Nvidia Earns 2024's Biggest Gain in Market Cap Amid AI Boom | PYMNTS.com

The artificial intelligence (AI) boom drove chipmaker Nvidia to become 2024's biggest global gainer in terms of market capitalization and the world's second-most valuable listed company. Nvidia had a market value of $1.2 trillion at the end of 2023 and $3.28 trillion at the end of 2024, Reuters reported Thursday (Jan. 2), attributing the surge in value to demand for the company's AI chips. Apple continued to be the world leader in market value, according to the report. Apple neared a $4 trillion valuation as investors anticipated the company benefiting from its AI enhancements. Rounding out the top five companies in market value in 2024 were Microsoft at $3.1 trillion, Alphabet at about $2.3 trillion, and Amazon, also at about $2.3 trillion, per the report. The AI boom has fueled explosive growth in the tech industry, with companies from chip manufacturers to security startups reporting soaring revenues and attracting significant investment, PYMNTS reported in October. In December, HSBC Innovation Banking said venture capital in the United States has moved to AI companies at an "unprecedented" rate, with the scale of capital invested in these companies by U.S. venture investors approaching that allocated to the rest of the venture market. "Venture capital has always gravitated toward transformative industries, but the level of consolidation we're seeing within one category is unprecedented," HSBC U.S. Innovation Banking Head Dave Sabow said in a Dec. 16 press release. As for Nvidia, the company advanced its grip on the AI market in 2024 with new hardware and tools. Nvidia's moves during the year included the launch of its Blackwell B100 and B200 GPUs that boosted generative AI capabilities and cemented the company's lead in high-performance computing; the introduction of the $249 Jetson Orin Nano Super Developer Kit that opened AI development to smaller players; and the formation of a growing number of partnerships across key sectors. Nvidia CEO Jensen Huang said in November that the trends seen among AI services are "really just beginning." "We expect this to happen, this growth, this modernization and the creation of a new industry to go on for several years," Huang said.

Nvidia Vs. Apple: Who Gets to $4 Trillion First? | Investing.com UK

As of Monday, Nvidia (NASDAQ:NVDA) grew its market cap by 186% over one year to $3.659 trillion. At the same time, Apple's (NASDAQ:AAPL) market cap rose moderately by 32% to $3.703 trillion. Although both tech companies outpaced the S&P 500 index (SPX), which grew by 25.4%, it is clear that the AI/GPU chip designer is a massive outlier. The question is, will the rapid growth follow Nvidia in 2025 as well, firmly leaving behind Apple's market cap dominance? Here are some indicators pointing to the affirmative answer. In the stock market, it is rare to see a company's valuation growth be as exceptional as Nvidia's. Not only did NVDA stock get a 2,346% boost over 5 years, but the company's forward price to earnings (P/E) ratio of 34.97 doesn't seem to deter investors from viewing it as overvalued. And for a good reason. From the GPU dominance in the video gaming market, Nvidia seamlessly transitioned into a go-to AI chip provider for training large language models (LLMs). The company made it happen due to the unmatched H100 chip performance for AI workloads. But this was only the first step. That edge was amplified by Nvidia's comprehensive (full-stack) software framework, making it easier for developers to pick the Nvidia ecosystem, integrating hardware and software for the artificial intelligence potential. And that potential is likely only to begin expanding in the text-to-video generation arena, which is poised to upend entire media/entertainment sectors. Incredibly beneficial for Nvidia, AI-powered video generation is by far more compute-demanding, requiring new levels of cost-efficiency that Nvidia's new Blackwell chips will meet. It is also likely that these types of services will attract subscription-based business models, further boosting demand for hyperscaling. In the meantime, Nvidia is sure to extend its GPU dominance with the RTX 50 series, which was recently announced at CES 2025. At a time when AMD (NASDAQ:AMD) gave up its high-end GPU pursuit to focus on the mid-range market instead, Nvidia holds 90% discrete GPU market share, per Peddie Research data as of Q4 2024. This is up from 81.5% in 2023. Although Intel's new Battlemage GPU has been positively received as the cost-to-performance option, Intel (NASDAQ:INTC) is yet to make a meaningful dent in this market. Moreover, PC users are more likely to pick Nvidia due to its 4th gen deep learning super sampling (DLSS) tech present in the RTX 50 series, giving them a performance edge in gaming (if properly implemented). For personal AI computing power, Nvidia's offering is also unmatched. The GB10 Blackwell Superchip found its way into Project DIGITS, an AI desktop PC priced at $3,000 and expected to be available in May. The AI-focused computer purportedly offers 1 petaflop performance in AI workloads, making it a premiere solution for compute power needed for machine learning. It is no secret that Apple has relied on massive share repurchases to make shareholders happy. But that is no substitute for innovation and market expansion. Compared to Nvidia's P/E of 34.97, Apple's forward P/E is slightly lower at 32.89. It is clear that Nvidia's P/E relies on the AI boom, but how is Apple's P/E justified? According to Counterpoint data for Q3 2024 published in November '24, Apple's worldwide smartphone market share is stagnant, oscillating between 16% and 17%. Having fallen from 23% in Q4 2023 due to Chinese competitors Vivo, Oppo, and Xiaomi, it is apparent that Apple needs an edge to make its bread & butter (smartphones) more enticing. Could that edge be AI? The Siri platform is already there and ready to be upgraded with more features. These will be limited to only iPhone 16, iPhone 15 Pro, and iPhone 15 Pro Max, in addition to the new iPad Mini with its A17 Pro chip. By March 2025, Apple should release iOS version 18.4, set to significantly expand Siri's capabilities, giving users contextual and personalized performance governed by AI. Although this rollout is likely to boost the Apple brand, it is less likely that its ecosystem will expand significantly. As of Q4 2024, Apple smartphone sales increased by 6% year-over-year, which could be amplified by the launch of the rumoured thinner iPhone 17 Air by the end of 2025. In other words, based on the sheer market cap momentum alone and still strong branding, Apple is also poised to reach $4 trillion. But this growth will likely be slower than Nvidia's. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Nvidia Stock Challenges Apple's Tech Dominance; Why Is NVDA Price Rising?

Simultaneously, with the firm venturing into the automotive industry, Apple's dominance remains threatened with rising AI adoption globally. The GPU manufacturing giant Nvidia has stolen the spotlight, potentially challenging Apple's dominance in the tech space, with its recent advancements. Particularly in the wake of the latest developments, such as the new RTX Blackwell series launch and the GPU manufacturer's entry into the automotive industry, market sentiments surrounding the Nvidia stock have turned highly bullish. As a response, NVDA price soared roughly 4% on Monday to reach $149.43, challenging AAPL's dominance with a remarkable surge in the stock's market cap. Nvidia has announced staggering developments at CES 2025, pioneering the AI & GPU chip manufacturing industry. Notably, the GPU manufacturing giant unveiled the GeForce RTX 50 series, a card boasted of outperforming RTX 4090, mirroring its Blackwell architecture as the year kicks off. This development has marked a monumental stride for the company. Further, the AI chip giant also unveiled 'DIGITS,' a personal AI supercomputer powered by the GB10 super chip, at CES 2025. Collectively, the launch of the new AI-related products appears to have substantially bolstered the market sentiment for Nvidia stock. Simultaneously, the AI giant's CEO, Jensen Huang, has conveyed immense optimism over robotaxis and the self-driving automotive industry, sparking another market buzz. Intriguingly, Huang stated, "I predict that this is going to be the first multi-trillion dollar robotics industry." While this statement already bolstered the firm's future, the keynote speech at CES 2025 also revealed that the AI chip manufacturer's upcoming automotive endeavors include collaborations with giants such as Tesla, Mercedes, Toyota, and Volvo, among many other companies. Altogether, in light of the abovementioned advancements, traders and investors are seeing a remarkable, bullish market sentiment prevailing for Nvidia's stock. Simultaneously, it's also noteworthy that NVDA's market cap is again nearing that of AAPL after overtaking it the previous year. Nvidia's market cap at the time of reporting was evaluated as $3.65 trillion, inching closer to Apple's $3.70 trillion. The rising market value reflects the firm's recent pivotal achievements, with CoinGape previously revealing that the NVDA stock price is poised to overtake AAPL in 2025. Also, some other AI stocks reflect the same potential, including Alphabet, Google, and Meta Platforms. Simultaneously, it's also noteworthy that the AAPL stock price traded at $245, up nearly 2% intraday. Market watchers continue to compare the stocks' prices as broader events continue to unfold, impacting investor sentiment.