Introduction
Nvidia (NVDA) stock has been trending upwards, with a 15% increase in just 19 days. After a zero-return period for six months, investors are wondering what’s behind this sudden surge. In this article, we’ll explore the multiple tailwinds driving Nvidia’s price increase and examine its prospects for the coming weeks.
Foxconn’s Record Revenue Fuels Excitement
The excitement surrounding Nvidia’s stock can be attributed to several factors, but primarily it’s due to Foxconn’s fourth-quarter results. Foxconn announced record revenue, up 15.17% YoY (Year-over-Year) and 15.02% QoQ (Quarter-over-Quarter). A significant contributor to this growth is the Cloud and Networking Products segment, which is mainly driven by products sold to Nvidia.
Nvidia’s AI-Driven Revenue Increase
The AI-driven revenue increase has fueled speculation about Nvidia’s quarterly results, driving the stock higher. This surge in revenue is a result of Nvidia’s strategic focus on artificial intelligence (AI) technologies. The company’s recent achievements and future prospects are expected to be discussed by CEO Jensen Huang at the upcoming Consumer Electronics Show (CES) 2025.
Nvidia’s Role in the AI Revolution
Nvidia’s role in the AI revolution is crucial, as it determines the speed of this technological advancement. Just like how Federal Reserve Chair Jerome Powell’s words are analyzed by the media to understand America’s economic well-being, Huang’s words will be closely watched to see where the AI revolution is headed.
Analyst Predictions
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 three years. Bank of America (BofA) has revealed that Nvidia was the most widely owned stock by active fund managers in the US and the most beloved stock among retail investors.
Nvidia’s Price Target
BofA has set a $190 price target on Nvidia, representing a 27% upside from its current value. This optimism is mainly caused by the release of Blackwell GPUs, which are the most powerful GPUs ever built by Nvidia.
Blackwell GPUs: A Game-Changer for Nvidia
These GPUs are expected to accelerate the development of future AI technologies and have already generated $200 billion in pre-booked orders over the next 12 months. This is a great time to be an Nvidia investor, as the market sentiment starts to price in all the exciting things this company is expected to do in 2025.
Nvidia Among Hedge Fund Portfolios
As per our database, Nvidia (NVDA) is one of the most popular stocks among hedge funds. Our latest list of the 30 Most Popular Stocks Among Hedge Funds reveals that Nvidia is a favorite among institutional investors. However, we acknowledge that some AI stocks may hold greater promise for delivering higher returns within a shorter timeframe.
Conclusion
In conclusion, Nvidia’s stock surge can be attributed to multiple tailwinds driving the price increase. The release of Blackwell GPUs and Nvidia’s role in the AI revolution are significant factors contributing to this optimism. As we look forward to 2025, investors are eagerly awaiting Nvidia’s quarterly results and future prospects.
Recommendations
If you’re looking for an AI stock with similar potential but trading at less than five times its earnings, consider our report on the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
