Nvidia’s meteoric rise could continue even after the company gained a $2 trillion valuation last year. Analysts have strengthened their forecasts for the semiconductor maker next year. Wall Street is focused on strong chip sales, rising AI spending and the release of Blackwell chips.
Nvidia gained a staggering $2 trillion in market capitalization last year as the market’s enthusiasm for artificial intelligence continues, according to Wall Street forecasters. The stock price may have room to rise further, he said.
The semiconductor giant’s stock rose 178% in 2024, making it the third best-performing stock in the S&P 500.
Despite the dizzying valuation, Wall Street remains bullish on the AI chip maker, with analysts betting on the company’s continued growth potential with steadily higher price targets. It’s launching.
The AI boom is expected to continue this year, providing another bullish backdrop for Nvidia, according to Wedbush Securities analysts.
“We have been discussing the AI revolution tirelessly because we believe it is the biggest technological transformation in over 40 years,” the analysts wrote in a note Thursday. “Nvidia and Cloud Stalwarts remain the powerhouses of AI.”
Here’s what Wall Street expects from chipmakers in 2025.
1. Stocks will remain the top stocks in AI
Wedbush said NVIDIA will continue to be a major attraction in the AI space and ranks the company at the top of the list of AI technology winners in 2025.
Analysts say spending on AI is also expected to “increase significantly” next year, estimating that the sector could see an additional $2 trillion in capital spending over the next three years. .
“This $2 trillion+ AI spending all started with the godfathers of AI, Jensen and Nvidia, who continue to push their chips to be the only game in town with new money and oil. ,” they said in a recent memo.
“2025 will see some crunch moments along the way, with a chorus of Fed concerns, China tariff poker games, and prolonged valuations, but… , there will be opportunities to own technology themes and key names that have traditionally been the focus of the company’s core technology investment strategy over the past two years,” they added in a separate note.
2. Blackwell will steal the show.
Investors will be excited about Blackwell’s success in 2025. And if the launch of Nvidia’s next-generation GPUs goes well, investors’ concerns about demand for Nvidia’s chips and its competitors in the space could fade, Morgan Stanley said.
“While we have tended to be most enthusiastic about NVIDIA when short-term data points appear to be mixed, the underlying dynamics are very strong. “We believe we are now nearing that point,” the bank’s analysts said in a note. “There are transitional pressures, but by 2:25 the only story will be Blackwell’s strength.” “We believe that it is possible,” he said.
Blackwell has already generated a lot of hype from Nvidia bulls. Shares soared last year after CEO Jensen Huang said demand for Blackwell was “insane” and raised hopes for profit growth.
The bank reiterated its “overweight” rating on the stock and said Nvidia is a “top choice” for next year. The strategists’ price target is $166 per share, implying a 21% upside from current levels.
3. Stock prices may see a major boost in January
Citi analysts said in a note late last year that the company’s stock price could rise as early as January after Mr. Huang’s keynote speech at the Consumer Electronics Show.
The Consumer Electronics Show will be held from January 7th to January 10th. Hwang’s opening speech is scheduled for the evening of January 6th. A question and answer session with analysts will be held the day after the lecture.
Huang’s speech is likely to raise expectations for Blackwell’s sales and could fuel a double-digit rally in Nvidia’s stock, said Atif Malik, an analyst at Citi.
“We begin a positive catalyst watch for January’s CES. We expect Blackwell’s sales forecast to rise further and management to talk about changes in demand for inference-driven companies and the robotics industry. ” Malik wrote.
In a note, the bank restated its “buy” rating on the stock and raised its price target to $175 per share, implying a 27% upside from current levels.
4. Strong chip demand must be matched by high expectations
Bank of America strategists say demand for Blackwell could exceed what Nvidia can produce for several quarters.
Meanwhile, demand for Hopper GPUs is also likely to remain strong.
“While we expect stocks to be volatile in the short term as investors digest the lack of ‘excitement,’ we continue to like the ‘essence’ of stocks,” BofA strategists wrote in a note late last year. “
However, high expectations for stocks can pose risks. Investors have been disappointed in recent quarters, even as Nvidia easily beat revenue estimates but fell just short of the highest expectations. Post-earnings stock declines have been seen in the past two quarters, but they were short-lived.
“Investor bullish expectations have consistently exceeded analyst consensus by 10-20 percentage points, limiting the element of surprise,” the strategists said.
The bank gave the stock a “buy” rating and reiterated its price target of $190, suggesting an additional 39% upside potential.
