Nvidia’s Remarkable Rise: What Investors Should Know for 2025

The journey for Nvidia (NASDAQ: NVDA) investors has been extraordinary over the past two years. Beginning 2023 with a market cap of just $359 billion, the company’s valuation has surged to over $3.35 trillion (as of now) — marking a staggering ninefold increase in under two years.

This meteoric rise can be attributed to Nvidia’s graphics processing units (GPUs), which have quickly become essential for powering artificial intelligence (AI). Revenue has skyrocketed by 480%, while net income has surged by an astonishing 1,270% since the start of this year.

Though it may be unrealistic to expect this level of growth to sustain, evidence suggests Nvidia’s future remains bright. Significant investments from major tech companies into their AI infrastructure largely involve Nvidia’s cutting-edge processors.

However, an important detail might be flying under the radar for investors — one that could indicate significant movement for Nvidia by 2025. Let’s explore it further.

Image source: Getty Images.

Recent Performance Highlights

For its fiscal 2025 third quarter, which concluded on October 27, Nvidia reported that its revenue reached $35.1 billion — a remarkable 94% year-over-year increase. Adjusted earnings per share (EPS) also rose impressively by 103% to $0.81, considerably exceeding management’s revenue growth forecast of 79%.

CEO Jensen Huang clearly articulated the driving force behind these strong results: “The age of AI is in full steam, propelling a global shift to Nvidia computing.”

The exceptional revenue growth stemmed from a continued increase in demand within Nvidia’s data center segment, which saw a year-over-year increase of 112%, totaling $30.8 billion. Much of this growth came from Nvidia’s Hopper architecture, the basis for its H200 Tensor Core GPU and the GH200 Grace Hopper Superchip — key components that support many of the world’s data centers and AI infrastructure.

Nvidia’s current processors set the standard, but they are slated to be replaced by the forthcoming Blackwell architecture, which defines the next generation of the company’s AI-oriented chips.

The company is actively increasing production of Blackwell processors, with expectations to ship “several billion dollars” worth of these chips in the fiscal 2025 fourth quarter, concluding in late January.

Upcoming Opportunities Driven by Demand

Nvidia has openly acknowledged the robust demand for its products, with major tech companies eager to secure the latest AI-centric chips. During a CNBC interview, Huang described the demand for Blackwell as “insane,” emphasizing, “Everybody wants to have the most, and everybody wants to be first.”

This overwhelming interest has resulted in demand exceeding supply, a scenario expected to persist for several quarters. In the earnings call, CFO Colette Kress noted, “Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand.” She further highlighted that “the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026,” which begins in late January.

The buildup of demand could significantly boost Nvidia’s sales as 2025 approaches.

Analyst Beth Kindig, CEO of the I/O Fund, anticipates that Blackwell processor sales in 2025 will surpass the combined sales of Nvidia’s GPUs for 2023 and 2024. She believes the company’s significant pricing power could yield a minimum of 50% growth in its data center sector next year, potentially resulting in as much as a 70% increase in the stock price for 2025.

Production Boosts Ahead

Nvidia is actively working with suppliers to ramp up production of its key processors. As the availability of these next-generation chips increases, so too will Nvidia’s revenue, as more chips become available for sale. This influx will bolster profits and could significantly elevate the stock price.

While the exact timing of supply chain improvements remains uncertain, Nvidia has a vested interest in addressing these challenges swiftly. Management historically adopts a conservative approach when estimating timelines, suggesting a gradual increase in the availability of these high-demand chips. This gradual easing of supply constraints is expected to drive Blackwell sales upward throughout the year.

Some investors fear that Nvidia’s growth may have peaked. However, this perspective may overlook future opportunities for those with a long-term investment mindset. Nvidia’s premium valuation has moderated, with Wall Street projecting an EPS of $4.41 in fiscal 2026, approximately 31 times the estimates for next year.

By 2025, it seems plausible that the supply levels of Nvidia’s top-tier Blackwell AI chips will increase, potentially leading to a significant rise in sales. It appears that this could be the spark to propel the stock price upward in 2025.

A Chance to Reconsider Your Investment Strategy

Have you ever felt like you missed out on investing in top stocks? If so, you may want to take note.

Occasionally, our expert analysis team identifies a “Double Down” stock recommendation for companies they believe are on the cusp of growth. If you’re concerned that you’ve lost your opportunity to invest, now may be the best time to reconsider ahead of the next opportunity.

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $350,915!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,492!
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $473,142!

Currently, we are issuing “Double Down” alerts for three remarkable companies, and this could be a rare opportunity.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

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