Nvidia (NVDA) stock is trending again. It is up 15% in 19 days. The 6 months before that was a zero-return period for the company’s stock, so many are wondering what’s changed. Multiple tailwinds are driving the price surge and are expected to continue to do so in the coming weeks.
To start off, it is Foxconn’s fourth quarter result that is driving most of the excitement today. Nvidia (NVDA) announced record revenue, up 15.17% YoY and 15.02% QoQ. The reason cited for this has a lot to do with Nvidia. The Cloud and Networking Products segment registered strong growth, a segment that is mainly driven by products sold to Nvidia. This AI-driven revenue increase has fueled speculation about Nvidia’s quarterly result, which is driving the stock higher.
In addition to the above, much of the hype in the last couple of weeks is derived from CEO Jensen Huang’s upcoming keynote at the Consumer Electronics Show (CES) 2025. The Nvidia leader is expected to talk later today about the company’s recent achievements as well as future prospects. The prospects are what everyone is interested in, as Nvidia’s role in the AI revolution is determining the speed of this revolution, quite literally. Much like how Fed Chair Jerome Powerll’s every word is analyzed by the media as it forms the backbone of America’s economic well-being, Huang’s words will be analyzed to see where the AI revolution is headed.
Analysts aren’t staying quiet about Nvidia’s prospects either. Wedbush analyst Dan Ives expects tech stocks to continue dominating in 2025, backed mainly by incremental capital expenditure on AI technologies over the next 3 years. Bank of America (BofA) recently revealed that Nvidia was the most widely owned stock by active fund managers in the US. It was also the most beloved stock of retail investors, who poured a record $30 billion into it in 2024. BofA has a $190 price target on the stock, which is a further 27% upside from here on.
All this optimism is mainly caused by the release of Blackwell GPUs. These are the most powerful GPUs Nvidia (NVDA) has ever built and are expected to accelerate the development of future AI technologies. With 12 months of orders already pre-booked, Nvidia is poised to make over $200 billion from the sale of these GPUs alone. This is a great time to be an Nvidia investor and the market sentiment is starting to price in all the great things this company is expected to do in 2025.
Nvidia is 5th on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 193 hedge fund portfolios held NVDA at the end of the third quarter which was 179 in the previous quarter. 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 timeframe. 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 was originally published at Insider Monkey.