Will NVIDIA still be a top stock to watch in 2025?

With the rapid development of Artificial Intelligence (AI) and the increasing demand for digital services, NVIDIA is particularly attracting attention in the stock market as one of the "Magnificent 7." The high-performance AI Chip "Blackwell" has seen a surge in demand, receiving massive orders from major companies such as Alphabet and Microsoft.
This new GPU has 25 times the energy efficiency of the previous model, with a significant technological advantage in efficiently operating large-scale language models. It is expected to ship 0.3 million units in the fourth quarter of 2024 and 0.8 million units in the first quarter of 2025, further strengthening its market dominance.

Moreover, with an overwhelming share of about 80% in the GPU market, NVIDIA enjoys strong support from developers. In particular, the adoption of the CUDA platform is progressing, providing AI-optimized solutions that differentiate it from competitors. These factors, combined with its above-average profitability and financial soundness in the industry, make NVIDIA's stock price expected to continue to grow. NVIDIA is also considered a reasonable and safe choice compared to competitors, especially due to its low price-earnings ratio (P/E) and debt ratio.

NVIDIA's new GPU architecture, "Blackwell," is designed to meet the advanced computational demands of AI. Compared to the traditional Hopper GPU, it operates efficiently with approximately 1/25 of the energy consumption while running large language models. This technology enables companies leveraging AI to achieve both cost reduction and performance improvement and has already received large orders from major companies such as Alphabet, Microsoft, and Oracle.
According to Morgan Stanley's forecast, it is expected that over 0.3 million units will be shipped in the fourth quarter of 2024 and over 0.8 million units in the first quarter of 2025. This scale of supply overwhelms other competing products, making it highly likely for NVIDIA to further strengthen its dominant position in the GPU market.
NVIDIA's technological innovation goes beyond just chip design, leading to the formation of an ecosystem that drives the evolution of the entire industry. This is the main reason why Blackwell is attracting attention.

One of the reasons NVIDIA's GPUs hold 80% market share is the presence of the CUDA platform. This specialized software framework for AI development and machine learning offers developers high operability and flexibility. It boasts significantly higher adoption rates compared to AMD's ROCm, with its optimization capabilities in the AI field supporting its evaluation.
Domain-specific libraries and microservices like CUDA X are attracting attention as tools that accelerate the development of AI applications, with many companies and research institutions progressing projects based on them. According to Precedence Research, the GPU market is expected to grow to around $141.4 billion by 2034, and the expanded adoption of CUDA within that market will further strengthen NVIDIA's market dominance.
In the developer community, NVIDIA also provides vast resources and support, leading to differentiation from its competitors. The expansion of developer base is believed to be an extremely important element for NVIDIA's future growth, as it creates a foundation for new applications and technological innovation.

The strength of NVIDIA's financial foundation is also a key element supporting the company's growth. Particularly noteworthy are its profitability and efficiency exceeding industry averages. According to Zacks Investment Research, NVIDIA's Return on Equity (ROE) of 120.4% significantly surpasses the industry average of 78.3%, demonstrating the company's ability to generate high profits.
Furthermore, NVIDIA's net margin has reached 55.7%, exceeding the industry average of 47.3%. This high level of profitability demonstrates the company's ability to secure stable profits even amidst intensifying competition in the AI market. Additionally, NVIDIA's debt ratio is below the industry average at 12.8% compared to 22.1%, substantiating its low financial risk.
These financial indicators suggest NVIDIA's potential for sustainable growth without being swayed by short-term trends. Moreover, the lower investment risk compared to its competitors is attractive to individual investors. NVIDIA's strong financial foundation can be seen as the cornerstone for the company to continue leading the market in the future.