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Prediction: Nvidia's stock price will soar in 2025. The reason is as follows. Danny Vena, Motley Fool November 29, 2024 (Friday) 7:03 PM
For Nvidia (NASDAQ: NVDA) investors, the past few years have been a non-stop thrill ride. The company's market capitalization was just 359 billion dollars as it entered 2023. Currently, its value has surged to over 3.35 trillion dollars (at the time of writing this article), increasing by more than 9 times in less than 2 years.
Driving this parabolic movement is the company's Graphics Processing Unit (GPU), which has quickly become the gold standard for enhancing artificial intelligence (AI). As a result, revenue has increased by 480% since the beginning of 2023, and net profit has surged by 1,270%.
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Investors should not expect the growth to continue at that scale, but there is plenty of evidence that Nvidia's tank still has enough gas. Many of the world's largest technology companies are continuing to invest heavily in upgrading their infrastructure to deal with the rigor of AI. For most companies, this means stocking up on Nvidia's cutting-edge processors.
Aside from the obvious secular tailwinds, there are important details that investors may be overlooking, and they could signal major moves for Nvidia in 2025. Please read to find out the reasons.
Driving this parabolic movement is the company's Graphics Processing Unit (GPU), which has quickly become the gold standard for enhancing artificial intelligence (AI). As a result, revenue has increased by 480% since the beginning of 2023, and net profit has surged by 1,270%.
Are you missing the morning scoop? The Breakfast News is a quick, silly, and free daily newsletter that provides everything. Sign up for free »
Investors should not expect the growth to continue at that scale, but there is plenty of evidence that Nvidia's tank still has enough gas. Many of the world's largest technology companies are continuing to invest heavily in upgrading their infrastructure to deal with the rigor of AI. For most companies, this means stocking up on Nvidia's cutting-edge processors.
Aside from the obvious secular tailwinds, there are important details that investors may be overlooking, and they could signal major moves for Nvidia in 2025. Please read to find out the reasons.
Brief summary
Nvidia's revenue for the third quarter of fiscal year 2025 (ending on October 27) surged by 94% year-on-year to $35.1 billion, with adjusted earnings per share (EPS) increasing by 103% to $0.81. This result far exceeded management's forecast of 79% revenue growth.
Management was clear about what fueled the impressive performance. "The era of AI is in full swing, driving a global transition to Nvidia computing," said CEO Jensen Huang.
Digging deeper into the results, Nvidia's continuous strong demand within the datacenter segment led to a 112% year-on-year increase, reaching $30.8 billion. Much of this revenue came from the Hopper architecture, the foundation of the company's H200 Tensor Core GPU, and the GH200 Grace Hopper Superchip, which currently powers many data centers and AI infrastructures worldwide.
While these processors are currently the benchmark, Nvidia's Blackwell architecture, representing the next generation of AI-centric chips, is poised to replace them.
The company is working to increase production of Blackwell processors and previously stated plans to ship these chips worth 'billions of dollars' in the fourth quarter of fiscal year 2025, which is expected to end in late January.
Nvidia's revenue for the third quarter of fiscal year 2025 (ending on October 27) surged by 94% year-on-year to $35.1 billion, with adjusted earnings per share (EPS) increasing by 103% to $0.81. This result far exceeded management's forecast of 79% revenue growth.
Management was clear about what fueled the impressive performance. "The era of AI is in full swing, driving a global transition to Nvidia computing," said CEO Jensen Huang.
Digging deeper into the results, Nvidia's continuous strong demand within the datacenter segment led to a 112% year-on-year increase, reaching $30.8 billion. Much of this revenue came from the Hopper architecture, the foundation of the company's H200 Tensor Core GPU, and the GH200 Grace Hopper Superchip, which currently powers many data centers and AI infrastructures worldwide.
While these processors are currently the benchmark, Nvidia's Blackwell architecture, representing the next generation of AI-centric chips, is poised to replace them.
The company is working to increase production of Blackwell processors and previously stated plans to ship these chips worth 'billions of dollars' in the fourth quarter of fiscal year 2025, which is expected to end in late January.
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