Nvidia’s AI Ambitions Set to Pay Off in 2025
Despite a stellar 2024, Nvidia’s stock has stumbled in recent weeks, with investors expressing concerns about the company’s ability to maintain its impressive growth pace. However, a closer examination of the chipmaker’s prospects reveals a significant catalyst that could propel the stock forward in 2025.
A Billion-Dollar Opportunity
According to investment banking and financial services provider Jefferies, Nvidia is poised to ship approximately 6 million data center graphics processing units (GPUs) in 2025, generating a staggering $180 billion to $200 billion in revenue. This forecast is conservative compared to the buy-side estimate of $205 billion to $215 billion. Morgan Stanley, for instance, expects Nvidia to generate $210 billion in revenue from sales of its Blackwell systems alone in 2025.
Data Center Dominance
Nvidia’s data center revenue has been a significant contributor to its overall performance. In the first nine months of fiscal 2025, the company’s data center revenue stood at $79.6 billion, with data center GPUs accounting for 76% of the total revenue. Assuming a 75% revenue contribution from data center GPUs in the fourth quarter of fiscal 2025, Nvidia’s revenue from these chips could reach $28 billion. This would bring the company’s total data center GPU revenue for fiscal 2025 to $97.6 billion.
Growth Prospects
Jefferies’ estimate suggests that Nvidia’s data center GPU sales could jump at least 84% in fiscal 2026, which coincides with the majority of calendar 2025. With an average selling price of $30,000 for each data center GPU, there is potential for a higher average selling price, allowing Nvidia to generate stronger data center GPU revenue in 2025.
A Buying Opportunity
With Nvidia’s stock trading at an attractive 32 times forward earnings, lower than the Nasdaq-100 index’s earnings multiple of 33, savvy investors may want to consider buying this AI stock while it’s still undervalued. The company’s price/earnings-to-growth ratio (PEG ratio) stands at 0.98, indicating that Nvidia is worth buying right now, given its earnings growth potential.
Don’t Miss Out
Nvidia’s AI ambitions are set to pay off in 2025, and investors who act now may be rewarded with significant returns. With the company’s growth prospects looking strong, it’s an opportunity that shouldn’t be missed.
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