Nvidia (NVDA) has already delivered impressive gains for investors, advancing over 1,400% in the past five years. The company’s dominant position in the artificial intelligence (AI) revolution has driven explosive earnings growth, with revenue rising double or triple digits quarter after quarter.
However, investor confidence took a hit recently due to import tariff uncertainties and restrictions on AI chip exports to China. Nvidia’s stock fell 29% from its start of the year low in April, but it has since rebounded along with the market.
Nvidia’s success can be attributed to its graphics processing units (GPUs), which are critical to AI tasks such as large language model training and inference. The company has built a comprehensive ecosystem of products and services supporting AI, resulting in significant growth. In the recent fiscal year, revenue soared 114% to $130 billion.
Recent quarters have seen strong demand for Nvidia’s products, with earnings numbers indicating continued customer investment. Major customers like Meta Platforms and Alphabet have reaffirmed their commitment to AI, increasing capital spending forecasts for the year.
One key metric driving investor optimism is Nvidia’s high gross margin, which has remained above 70% in recent quarters. The company expects gross margins of 71.8% and 72% in the upcoming quarter, driven by its Blackwell architecture.
Despite ongoing challenges, including US restrictions on chip exports to China, Nvidia’s solid profitability and demand for its products position it for continued success. With a strong track record of growth and increasing profits, investors may see significant upside in 2025.
Source: https://www.fool.com/investing/2025/06/01/prediction-nvidia-stock-will-soar-in-2025