Nvidia’s shares have seen a significant decline in 2025 after soaring over 800% in the last two years, mainly due to uncertainty surrounding its demand for graphics processing units (GPUs) used in AI research. However, recent developments from top customers, including Amazon and Meta Platforms, suggest a growing appetite for AI chips.
One reason to consider buying Nvidia’s stock on the dip is the increasing investment by major cloud service providers. Amazon’s capital expenditures are expected to reach $100 billion in 2025, with a focus on technology infrastructure supporting its cloud and AI services. Moreover, Meta Platforms plans to invest hundreds of billions of dollars in AI infrastructure, driven by its use of Nvidia’s GPUs for training AI models.
Another area driving optimism is the growth of gaming and automotive markets. Nvidia’s gaming segment has seen a significant increase, with sales rising from $1.5 billion in 2023 to $3.2 billion in the third quarter of 2025. Additionally, the company’s automotive revenue has grown substantially, driven by its Drive computing platform for autonomous vehicles.
Nvidia’s total addressable market is pegged at $1 trillion, and analysts expect the company’s revenue and earnings to increase by 51% this year. Considering a more reasonable forward price-to-earnings multiple of 30, Nvidia’s stock may be undervalued, making it an attractive opportunity for investors. Despite DeepSeek’s recent achievement in building a low-cost large language model, it is unlikely to harm Nvidia in the long run, as it drives faster innovation in AI and benefits the top AI chip supplier.
Source: https://www.fool.com/investing/2025/02/19/2-reasons-buy-nvidia-stock-wake-deepseek