A Year of Resilience and Growth
As we enter the new year, the same themes that drove sharp returns among the Magnificent 7 stocks in 2024 appear to be very much alive. The tech revolution, fueled by artificial intelligence (AI), continues to shape the market landscape. Amidst this backdrop, NVIDIA (NASDAQ:NVDA) stands out as a notable performer. In this article, we’ll delve into the company’s 2025 outlook and explore what’s driving its growth.
A New Year, Same Focus on AI
In 2024, AI became a dominant force in the market, with many companies riding the wave of innovation. NVIDIA was at the forefront of this trend, powering 25% of S&P 500 gains that year (1). As we move into 2025, it’s clear that AI will continue to be a major focus area for the company.
CES 2025: A Key Event
The Consumer Electronics Show (CES) is one of the most significant events in the tech industry calendar. This year, NVIDIA CEO Jensen Huang will deliver the keynote address on Tuesday night (2). The event promises to be a showcase for the latest innovations in AI and technology, with NVIDIA at the center of attention.
A Strong Earnings Forecast
Ahead of its Q4 2025 earnings report in February, analysts are expecting strong growth from NVIDIA. Consensus estimates call for $0.85 in non-GAAP EPS, representing a 64% increase over the previous year (3). For FY 2025, per-share earnings are expected to rise by 128%, with 50% EPS growth in the out-year.
BofA’s Bullish Outlook
Bank of America recently noted that NVIDIA’s forecasted sales increase could make it the fastest top-line grower in the S&P 500 this year (4). The company’s modest 0.6x forward PEG ratio is also seen as low compared to other large technology stocks trading 2-2.5x on a PEG basis.
A New Year, Same Themes
As we enter the new year, it’s clear that some of the same themes that drove price action in 2024 will continue to shape the market landscape. AI is poised to snatch the spotlight once again this week at CES, with Jensen Huang delivering the keynote tonight. NVIDIA then takes the stage a couple more times in Las Vegas before the firm heads west to San Francisco next week at the J.P. Morgan Healthcare conference.
A Volatile Ride Ahead
As we navigate the complexities of the market, it’s essential to be aware of potential volatility. Traders should brace for possible price movements and keep their eyes on earnings forecast trends ahead of NVIDIA’s Q4 report in February.
References:
(1) NVDA, StockCharts, January 3, 2025
https://schrts.co/zGayZzNe2
(2) NVIDIA CEO Jensen Huang to Deliver CES 2025 Keynote, CES
https://www.ces.tech
(3) NVIDIA Corporation (NASDAQ:NVDA), YahooFinance
https://finance.yahoo.com
(4) Bank of America retains Nvidia stock as Top Pick heading into CES next week, Investing.com
https://www.investing.com