There are many factors that could impact Nvidia’s stock price heading into 2025.
No company has benefited more from the artificial intelligence (AI) hype than Nvidia. (NVDA 1.69%).
Demand for the company’s graphics processing units (GPUs), data center services, and computing unified device architecture (CUDA) software has driven its stock price up 900% over the past two years.
Below, I’ll explore the catalysts that I think could continue the rally in NVIDIA stock, while recognizing some risk factors that could hinder its rally. Finally, I’ll reveal my final prediction for where Nvidia stock will go in 2025.
What’s causing Nvidia’s stock price to rise?
Over the past few months, investors have gained more insight into the spending plans of many of the technology sector’s biggest companies. Microsoft, Meta Platforms, Alphabet, Amazon, and Tesla all acknowledge the need for more AI infrastructure.
Increased capital spending (Capex) by major technology companies will be a tailwind for Nvidia’s computing and networking business. More specifically, the company’s introduction of Blackwell GPUs is set to be a big bellwether for Nvidia, and I suspect the big tech company will be at the forefront of these new chips.
Nvidia CEO Jensen Hwang recently said that demand for Blackwell was “insane,” and Chief Financial Officer Colette Kress said that “Blackwell’s “We expect revenues to be in the billions of dollars.”
Blackwell production starting next year, coupled with further planned spending by big tech companies, should bode well for NVIDIA. As a result, I wouldn’t be surprised to see Nvidia stock rise in 2025.
Image source: Getty Images
What’s causing Nvidia stock to fall?
One of my biggest concerns with Nvidia stems from competition. All of the mega-cap tech companies mentioned above are considered some of Nvidia’s biggest customers, but the company’s plans to increase spending on AI infrastructure aren’t all good news for the company.
Many of these tech giants have already started developing their own chips to break away from their dependence on Nvidia. These moves could have knock-on effects for Nvidia in the form of slower revenue and profit growth. As a result, Nvidia’s stock price could fall.
It’s this particular dynamic that interests me as to why big-name hedge funds like Ken Griffin’s Citadel and David Shaw’s DE Shaw are reducing their positions in Nvidia. Even with the launch of Blackwell, so-called smart money hedge funds appear to be profiting from Nvidia stock.
I think some of the sales activity is influenced by the fact that expectations for Nvidia increase with each earnings report. Assessing the success of Blackwell’s launch is quite subjective. Even if these new GPUs contribute to further record growth for Nvidia, investor expectations may be out of touch with reality.
After that, both retail and institutional investors could punish the stock, and NVIDIA stock could plummet.
My predictions for Nvidia’s price trend in 2025
Although it may seem like I’m avoiding firm predictions, I think Nvidia stock will remain largely unchanged in 2025. There are several factors that could prompt more buying and selling of Nvidia stock next year. , but I haven’t found any of these materials sufficient to cause an annual increase or decrease.
What I’m wondering is, could NVIDIA’s stock price rise another 900% over the next year or even 10 years? In my eyes, the answer is a strong no. So in 2025, owning Nvidia stock will probably be quite profitable, but I think timing will be a big factor here.
However, as a long-term investor, I avoid timing stocks and instead look for high-quality businesses that can generate consistent returns over many years.
Can Nvidia keep it going? Maybe. But I think it’s more likely that Nvidia stock has peaked and its best days are in its rearview mirror.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Suzanne Frey, an Alphabet executive, is a member of the Motley Fool’s board of directors. Adam Spatacco has held positions at Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
