Nvidia stock has skyrocketed 200% over the last year. Can the AI frontrunner serve up more wins in 2025 and beyond?
Nvidia (NVDA 4.45%) stock posted significant gains in Friday’s trading. The artificial intelligence (AI) leader’s share price closed out the day’s trading up 4.5%. Meanwhile, the S&P 500 index and the Nasdaq Composite index saw gains of 1.2% and 1.7%, respectively.
Nvidia stock saw bullish momentum in today’s trading following news about Microsoft‘s planned AI infrastructure spending for 2025. Microsoft is the semiconductor specialist’s largest customer and purchases more advanced graphics processing units (GPUs) from it than any other major tech player. On the heels of today’s gains, Nvidia stock is now up 200% over the last year of trading.
Is Nvidia stock a buy for 2025?
Nvidia stock’s incredible run naturally raises questions about whether investors can still score significant wins with the AI leader. On the other hand, the company’s high-performance GPUs continue to be the foundation-level hardware powering advanced AI applications — and the chip leader maintains a strong competitive edge in the space.
Most analysts suggest that the company has a market share of at least 80% in the booming AI chip market. Depending on how the category is sliced, some breakdowns suggest that Nvidia has a market share well above 90% when it comes to the most important and profitable categories of the AI chip market.
With that market dominance in mind, recent commentary from Microsoft looks very bullish for Nvidia. In a recent blog post, Microsoft Vice Chair and President Brad Smith said that the company is planning to invest roughly $80 billion in AI data centers this year. With the software giant expected to record capital expenditures (capex) of roughly $53 billion in 2024, that implies that the company’s spending on AI infrastructure will increase at least 51% in 2025. Given that the 2024 capex figure included spending on some other categories, growth for AI data center investments could come in significantly above that level — and Nvidia looks poised to be the prime beneficiary.
Massive gains for the stock and the historically cyclical nature of the business have made Nvidia’s stock outlook more speculative, but the recent commentary from Microsoft is a very bullish indicator. With signs that demand for hardware to build out AI infrastructure is still expanding at a rapid clip, Nvidia stock continues to look like a worthwhile buy for long-term investors.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
