Is It Too Late to Buy Artificial Intelligence (AI) Leader Nvidia in 2025? There's a Growing Mountain of Evidence Piling Up That Provides a Crystal Clear Answer.

Microsoft's AI Investment - Microsoft plans to invest approximately $80 billion in fiscal 2025 to build AI-enabled data centers, marking a significant increase from the $56 billion spent last fiscal year, which was a 44% increase [1] - The company views AI as a transformative technology comparable to electricity, with the next four years being crucial for laying the foundation for America's economic success [1] Nvidia's Market Position and Growth - Nvidia's stock has gained over 850% in the past two years and is currently priced at roughly 32 times next year's expected sales, indicating a reasonable valuation despite its rapid growth [2] - The company dominates the data center GPU market with a 98% market share in 2023, and its leadership position is expected to remain unchallenged in the near future [4] - Nvidia's GPUs, originally developed for gaming, are now essential for AI applications, with demand for its high-end AI processors exceeding supply [3][4] Nvidia's Financial Performance - Nvidia achieved record revenue of $35 billion in its fiscal 2025 third quarter, a 94% year-over-year increase and a 17% sequential increase [5] - Adjusted earnings per share (EPS) surged 103% to $0.81 in the same quarter, reflecting strong profitability despite slowing growth rates [5] Nvidia's Future Prospects - The company's Hopper AI processor has been highly successful, and the recently released Blackwell chip is expected to generate even more sales, with production already sold out for the next 12 months [6] - Despite the end of triple-digit growth, Nvidia is believed to have a long runway ahead due to its industry-leading technology and the increasing adoption of AI [6] Tech Giants' AI Spending - Alphabet plans to spend about $51 billion on capex in 2024, with substantial increases expected in 2025 to support AI development [8] - Amazon is projected to spend $75 billion on capex in 2024, with the majority allocated to its cloud unit, Amazon Web Services (AWS), driven by generative AI [8] - Meta Platforms is on track to spend roughly $39 billion in 2024, with significant capital expenditure growth expected in 2025 to support AI research and product development [8] Nvidia's Customer Base - Nvidia's four biggest customers, responsible for 40% of its revenue, include Microsoft (15%), Meta Platforms (13%), Amazon (6.2%), and Alphabet (5.8%) [10][11] - These companies have clearly stated their plans to ramp up capex spending, primarily to support cloud computing and AI, with Nvidia being the principal beneficiary due to its dominance in the data center GPU market [9][10]