The artificial intelligence (AI) company’s value hit $2 trillion last year, and Wall Street thinks it could rise even more in 2025

It’s been another great year, especially for technology stocks. Tailwinds from artificial intelligence (AI) S&P500 While 23% higher; Nasdaq Composite It increased by a whopping 29%.

”Magnificent Seven“The stock has been one of the market’s biggest gainers this year, and perhaps no stock has garnered more attention than the semiconductor leader.” Nvidia –This was the best performing stock among them. Dow Jones Industrial Average In 2024.

Last year, Nvidia had a market capitalization of about $2.1 trillion, the most of any company. This has made Nvidia one of the most valuable companies in the world. While Nvidia’s current performance may suggest the stock is due for a decline, Dan Ives, a technology analyst at Wedbush Securities, believes the AI ​​darling has more growth potential. He claims to be waiting, and I agree.

Let’s take a look at Nvidia’s latest catalyst and discuss why 2025 could be a new record.

Over the past two years, Nvidia has emerged as a leader in the AI ​​marathon, and it all comes down to the graphics processing unit (GPU). GPUs are advanced chipsets required for developing generative AI applications.

Nvidia’s rich array of GPUs has helped separate the company from competitors such as: advanced micro deviceget Estimated 90% of GPU market.

To add some context here, Nvidia’s dominance has driven the company’s consistent revenue and profit growth, allowing it to double its research and development (R&D) and pioneer new and more innovative products. Enter Blackwell, Nvidia’s next generation GPU architecture. This is reportedly already sold out over the next 12 months.

While this is more of an enterprise-specific tailwind, Ives believes that widespread investment in AI infrastructure could exceed $1 trillion over the next few years. Nvidia is taking advantage of a windfall of increased capital expenditures (Capex) backed by investments in GPU cluster experts in Europe. Neviusacquired AI infrastructure business Run:ai for a reported $700 million.

Given the significant rise in Nvidia’s stock price, it would be wise to examine some of the company’s valuation metrics and cross-reference them with the catalysts discussed above.

Data source: YCharts.

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