This Artificial Intelligence (AI) Company Gained $2 Trillion in Value Last Year, and Wall Street Thinks It Could Be Headed Much Higher in 2025

Market Performance and Valuation - Nvidia gained $2 trillion in market capitalization in 2024, making it one of the world's most valuable companies [1][3] - The S&P 500 rose by 23% and the Nasdaq Composite gained 29% in 2024, driven by AI tailwinds [1] - Nvidia's P/E and P/FCF ratios are lower than a year ago, suggesting the stock's valuation is reasonable despite its price rise [8] - Nvidia's PEG ratio of 1 indicates the stock is fairly valued [9] Industry Leadership and Competitive Advantage - Nvidia has emerged as the leader in AI, primarily due to its dominance in GPU technology, capturing an estimated 90% of the GPU market [4] - The company's deep roster of GPUs has helped it outperform competitors like Advanced Micro Devices [4] - Nvidia's next-generation GPU architecture, Blackwell, is already sold out for the next 12 months [5] Growth Catalysts and Strategic Investments - Broader investments in AI infrastructure are expected to exceed $1 trillion in the coming years, benefiting Nvidia [6] - Nvidia is leveraging rising capital expenditure through investments in European GPU cluster specialist Nebius and the acquisition of AI infrastructure business Run:ai for $700 million [6] - The company's consistent revenue and profit growth have enabled it to double down on R&D and innovate new products [5] Future Outlook - Nvidia is positioned to potentially become the first company to enter the $4 trillion market cap club in 2025 [10] - The company's earnings profile is expected to improve significantly as Blackwell and other investments begin to yield results [9]