The themes that drove sharp returns among the Magnificent 7 stocks in 2024 appear to be alive and well in 2025. The AI story is set to take center stage once again, with NVIDIA (NASDAQ:NVDA) being one of the most notable beneficiaries.
NVIDIA’s Stellar 2024 Performance
Last year, NVIDIA delivered a stellar performance, driving 25% of the S&P 500’s gains in 2024. The company’s AI surge was a key driver of its success, with its co-founder Jensen Huang being named among the fastest-growing executives in the industry.
CES 2025: NVIDIA’s Keynote Address
This week, NVIDIA takes center stage at CES 2025, with CEO Jensen Huang delivering the keynote address tonight. The event is expected to be a major focus for AI enthusiasts and investors alike, with NVIDIA showcasing its latest innovations in the field.
Jensen Huang’s Vision for the Future
In his 2024 keynote address, Jensen Huang outlined his vision for a future where every industry becomes a technology industry. This year, he is set to elaborate on this vision, highlighting the key role that AI will play in driving innovation and growth across various sectors.
NVIDIA’s FY 2025 Outlook
Ahead of its Q4 report in February, analysts are expecting NVIDIA to deliver strong results. The consensus calls for $0.85 in non-GAAP EPS for the quarter ending in January, marking bottom-line growth of 64%. For FY 2025, per-share earnings are expected to rise by 128% to $2.95 with 50% EPS growth in the out year.
BofA’s Bullish Outlook
Bank of America recently noted that NVIDIA’s 50% forecasted sales increase could make it the fastest top-line grower in the S&P 500 this year, with a potential for a 20%-plus revenue increase in FY 2026. The bank’s analysts also call out the company’s modest 0.6x forward PEG ratio as being low compared to other large technology stocks trading 2-2.5x on a PEG basis.
The Bottom Line
As we enter 2025, it is clear that some of the same themes that drove price action in 2024 are likely to be in focus once again. AI is poised to snatch the spotlight at CES this week, with NVIDIA taking center stage multiple times before heading west to San Francisco next week for the J.P. Morgan Healthcare conference.
Traders should brace for possible volatility and keep their eyes on earnings forecast trends ahead of NVIDIA’s Q4 report in February. With a strong FY 2025 outlook and a potential for further growth in FY 2026, NVIDIA is set to continue its dominance in the AI space.
References
- NVDA, StockCharts, January 3, 2025, https://schrts.co/zGayZzNe2
- Nvidia’s AI Surge Powers 25% of S&P 500 Gains in 2024, Makes Co-founder Huang Among Fastest Growing: Report, Yahoo Finance, Anusuya Lahiri, September 16, 2024, https://finance.yahoo.com
- NVIDIA CEO Jensen Huang to Deliver CES 2025 Keynote, CES, October 7, 2024, https://www.ces.tech
- J.P. Morgan CES Fireside Chat, NVIDIA, January 3, 2025, https://investor.nvidia.com
- CES Financial Analyst QA, CES, January 3, 2025, https://investor.nvidia.com
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