Nvidia (NVDA) has had a remarkable year, with its stock gaining over 850% since the AI revolution began in early 2023. However, recent market trends have led to concerns about the company’s future prospects.
Despite these concerns, several catalysts suggest that Nvidia’s stock may continue to perform well in 2025. CEO Jensen Huang’s keynote address at CES on January 6 is expected to generate excitement and provide updates on demand for Nvidia’s Blackwell platform, a next-generation processor designed for AI applications. Analysts predict a positive impact on the stock price.
Another significant event is Nvidia’s fiscal 2025 fourth-quarter financial report, scheduled for February 26. If the company exceeds expectations, it could boost the stock price further. Additionally, a study by PwC estimates that AI has the potential to add $15.7 trillion to the global economy by 2030, suggesting that investor fears about AI adoption may be overblown.
Nvidia’s valuation is also worth considering. Although its current multiple is higher than some might prefer, it’s historically cheap and expected to improve in fiscal 2026. The company has a track record of growth, with an average P/E ratio of 59 over the past decade.
Ultimately, investors should consider buying Nvidia stock if they believe in AI’s transformative potential and its role as a principal beneficiary. While there are risks involved, the potential upside suggests that Nvidia is a compelling opportunity for investors heading into 2025.
Source: https://www.fool.com/investing/2024/12/29/should-you-buy-nvidia-stock-before-2025