We recently published a list of 10 Hottest Mega-Cap Stocks of 2025. In this article, we are going to take a look at where Nvidia Corporation (NASDAQ:NVDA) stands against other hottest mega-cap stocks of 2025.
In 2024, companies poured money into Artificial Intelligence infrastructure in a bid to outpace each other in the AI race. The communication services and information technology sectors led the the large-cap stocks in terms of returns. AI-driven hype was so significant that for the first time since 1998, the S&P’s large-cap index registered two consecutive years of 20%+ gains.
2025 may well be the year of reckoning for AI. Some analysts have questioned the massive AI spending throughout the last year. Their concerns and predictions were dealt a reality check though when Bill Gates’ tech giant announced it planned to spend $80 billion on AI in fiscal 2025. Consequently, semiconductor stocks rallied, reminding everyone that the AI rally wasn’t over by any means.
Not surprisingly, the list is dominated by chipmakers, who we believe will be critical to the market’s returns this year. To come up with the 10 hottest mega-cap stocks of 2025, we considered stocks with at least $75 billion market capitalization.
Nvidia Corporation (NASDAQ:NVDA)
Nvidia Corporation (NASDAQ:NVDA) is on course to become the most valued company by market cap. While there are multiple ways to determine the financial value of a company, it is hard to determine the impact value that a company like Nvidia commands. Nvidia Corporation (NASDAQ:NVDA) makes the best GPUs in the world. Its stock tripled in 2024 because of this simple reason.
These GPUs weren’t originally designed for AI tasks though. They served multiple purposes, which also happened to include a vital role in Large Language Models training. This year, Nvidia will roll out its Blackwell line of GPUs. These are extremely powerful GPUs that have been designed to keep AI demands in mind. Being the first of their kind, they’ll determine Nvidia stock’s direction this year.
Much of the impact is already priced into the stock. However, the company is still valued cheaper than its competitors by one metric. Moreover, it could potentially branch out to other sources of revenue, including building its own cloud business and robotics. These possibilities will keep the stock relevant throughout the year, not that its core chip business was any less significant.
Analysts are also bullish on the stock, with Bank of America recently revealing that it was the most widely owned company among US fund managers. Nvidia Corporation (NASDAQ:NVDA) also attracted record retail investors’ funds in 2024 and was the most sought after stock by this investor group. The story is unlikely to change in 2025.
Overall, NVDA ranks 3rd on our list of hottest mega-cap stocks of 2025. While we acknowledge the potential of NVDA as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.