As 2024 draws to a close, savvy investors are eager to rebalance their portfolios to maximize returns in 2025. Artificial intelligence (AI) remains a hot investment theme on Wall Street, making high-quality AI-powered stocks attractive picks for the new year.
Nvidia: A Leader in AI Infrastructure
Nvidia’s impressive Q3 fiscal 2025 earnings report showcased the company’s continued dominance in AI infrastructure. Its Hopper architecture chips remain in high demand, with sales reaching double-digit billions in the third quarter. The recently launched H200 GPU saw the fastest product ramp-up in the company’s history, with 13,000 GPU samples already shipped to customers. Nvidia’s next-generation Blackwell architecture GPUs are also gaining traction, with demand far outpacing supply for several upcoming quarters.
Beyond AI-Optimized Chips
Nvidia’s cloud-native Enterprise AI software suite is gaining solid adoption, with industry leaders using the platform to build AI agents and CoPilots. The company expects Enterprise AI to emerge as a major growth driver in the coming years, with billions of agents expected to be deployed. Additionally, Nvidia’s Industrial AI and robotics divisions are poised to become significant growth opportunities.
A Solid Investment Choice
Despite concerns about Nvidia’s high valuation multiples, the company’s robust growth prospects justify its valuation. Trading at a price-to-earnings (P/E) multiple of 54.4 times, far lower than its five-year average P/E multiple of 75.7 times, Nvidia presents a compelling investment opportunity.
Amazon: A Cloud Computing Powerhouse
Amazon’s Q3 2024 results exceeded expectations, driven by broad-based growth across all businesses. Amazon Web Services (AWS) and advertising segments stood out, with AWS continuing to benefit from companies modernizing their IT infrastructure and adopting generative AI technologies at scale. AWS revenues grew by 19.1% year over year to $27.5 billion, with operating income increasing by $3.5 billion to $10.4 billion.
Advertising Strength
Amazon’s advertising business grew 18.8% year over year to $14.3 billion, driven by its expansive reach across products, services, geographies, and demographics. The company’s full-funnel advertising services, generative AI-powered creative tools, and increasing strength in digital advertising position it for strong gains in 2025.
A Strong Investment Backdrop
With a robust financial foundation, ongoing leadership in cloud computing, advancements in AI, and increasing strength in digital advertising, both Nvidia and Amazon are poised for significant growth in 2025.
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