NVIDIA ($NVDA) Corporation has been in the news since 2024 because of its connection with artificial intelligence (AI). Major tech giants such as Alphabet, Meta, and Microsoft have been spending billions of dollars on various products this semiconductor chipmaker offers, ranging from GPUs to data centers to AI-driven computing. NVIDIA is a pioneer and a dominant player in the semiconductor and artificial intelligence space. Its stock price is up 1,964% in the last five years. Around 78% of its employees are millionaires and several investors have made massive returns on the stock.

As we start 2025, it is important to understand what the NVIDIA stock forecast holds for the new year and whether it still has the capability to retain its charm as one of the best-performing assets in the tech sector. We believe it will and consider it a strong buy.

Current Stock Performance

As of 7 February 2025, NVIDIA’s stock closed at $129.84. The stock has experienced significant volatility in the last couple of months due to multiple factors, including AI adoption rates and competitive developments.  

The third-quarter results release showcased NVIDIA’s potential and determination to be at the top of the semiconductor tech industry. Revenues reported were $35.08 billion, up 94% Year over Year, whereas data center revenue was reported at $30.8 billion, up 112% Year over Year. The net income figure was also impressive, more than double the previous year's, standing at $19.31 billion.

The revenue growth shows that NVIDIA has been consistently performing well. It is fulfilling the growing demand for AI-driven technologies and becoming a leading supplier of GPUs, which are essential for the tech industry. The AI-driven data center segment is the primary revenue driver, showcasing endless opportunities for NVIDIA’s growth.

The next earnings report is scheduled to be released on February 26.

AI Market and Growth Opportunities

The way AI is transforming every sphere of life opens doors for immense opportunities for companies like NVIDIA, whose AI chips power advanced computing solutions used in cloud computing, AI model training, and data analytics. The recent Blackwell AI processors have been experiencing unprecedented demand, which shows that NVIDIA is ruling the AI chip manufacturing arena. This dominance, along with the reliance and shift towards AI-driven models in almost all industries ranging from healthcare to finance to manufacturing, paved the way for revenue expansion and, in turn, the company’s massive growth.

Automotive and Edge Computing

NVIDIA is performing remarkably well in AI and taking essential steps in the autonomous vehicle industry. Many leading automobile companies use their own DRIVE platform for self-driving technology, further enhancing NVIDIA’s position in the automotive AI market. Also, NVIDIA is advancing edge computing solutions, which are expected to play a vital role in the Internet of Things (IoT) and real-time AI applications.

Recent Competitive Landscape and its Impact on NVIDIA’s Stock Price

One of the significant developments that initially shook the AI industry was the emergence of China-based DeepSeek, which introduced an AI model that could operate with significantly reduced computing power compared to what NVIDIA offers. This announcement shook the AI industry and shocked NVIDIA's loyal investors. This was reflected in NVIDIA’s stock price dropping, leading investors to worry about the potential disruptions in NVIDIA’s AI market dominance. While all this lasted for some time, further clarifications from the US Government and many geopolitical factors aimed that DeepSeek would not be able to threaten the position that NVIDIA holds, mainly because of two reasons – DeepSeek is under many regulatory checks for various concerns such as being accused of using OpenAI’s data to make the software. Moreover, in some countries like Italy, DeepSeek has already been banned. So, even though the sheer announcement might have led to stock price fluctuations, the condition doesn’t seem to remain the same in the coming times.

NVIDIA’s Still in the Race for the Top Position in the AI Industry

While NVIDIA’s fundamentals are outstanding, showcasing its strong foundation and business acumen, many other factors are also working in its favor:

• Trump’s recently announced Stargate project, which calls for up to half a trillion dollars in AI infrastructure investment, involves NVIDIA, one of the companies working on this project.
• Major tech giants Alphabet, Meta, and Microsoft are expected to spend a cumulative $228 billion in capital expenditures in 2025, with a major emphasis on AI and data centers. This will open doors for continuing demand for NVIDIA’s products.

Is NVIDIA a Good Stock to Buy in 2025?

Considering the company's strong past performance and tight hold on the market, many analysts maintain bullish on NVIDIA. The key factors that support this optimistic forecast are as follows :

• NVIDIA’s dominance in AI chip production, at a time when AI is at the forefront of any technology, ensures rapid, continual revenue growth.
• New product launches and continuous innovations, such as the Blackwell AI series, strengthen NVIDIA’s position among its competitors.
• NVIDIA’s commitment to shareholder value through buybacks and dividends attracts long-term investors.

While various positive factors make NVIDIA a good stock to buy and hold, it is essential to understand the challenges and plan the investment accordingly. There are various regulatory challenges, such as the Government’s restriction on exports to China, which could limit NVIDIA’s and the industry’s revenue potential. Rising competition from AMD, Intel, etc., could also challenge NVIDIA to maintain its leading position in the industry.

Investing in NVIDIA is favorable in the long run as it has solid growth potential. Investors should foresee price swings in the short term and even try to diversify their portfolio by adding other AI stocks to mitigate risk.

Investors need a price target and stop-loss so that they know when to exit and make gains from the market. Many analysts believe that NVIDIA might reach a price ranging from $180 to $200 per share by the end of 2025. For investors who stay invested in it long-term, NVIDIA remains an attractive BUY due to its high long-term growth potential.

Conclusion

Every investor has their expectations from the market. While NVIDIA shows promising potential, and with the Q4 earnings release around the corner, it is important to understand one’s expectations from the stock, and investments should be made accordingly to yield sweet returns.