This artificial intelligence (AI) company gained $2 trillion in value last year, and Wall Street thinks it could rise much higher in 2025

Last year was another great year for tech stocks in particular. Tailwinds powered by artificial intelligence (AI) helped boost the S&P 500 higher by 23%, while the Nasdaq Composite won an impressive 29%.

The “Magnificent Seven” stocks were among the market’s biggest gainers of the year, and perhaps none attracted more attention than the semiconductor leader. NVIDIA — which was the highest performing stock in the Dow Jones Industrial Average in 2024.

Last year, Nvidia earned about $2.1 trillion in market capitalization, the highest of any company. This propelled Nvidia to become one of the most valuable companies in the world. While Nvidia’s current run might suggest the stock is about to pull back, Wedbush Securities technology analyst Dan Ives is calling for significantly more growth ahead for the AI ​​darling, and I agree.

Let’s take a look at Nvidia’s latest catalysts and make the case why 2025 could be another year in the record books.

Over the past two years, Nvidia has become the leader of the pack in the AI ​​marathon, and it all comes down to one thing: graphics processing units (GPUs). GPUs are advanced chipsets required for developing generative AI applications.

Nvidia’s extensive list of GPUs has helped the company separate itself from competitors like Advanced Microdevicesand acquire approximately 90% of the GPU market.

To add some context here, Nvidia’s dominance has driven steady growth in the company’s revenue and profits, allowing it to double its investment in research and development (R&D) and pioneer even more products. new and innovative. Enter Blackwell, Nvidia’s next-generation GPU architecture, which is reportedly already out of stock for the next 12 months.

While this is more of a company-specific tailwind, Ives believes broader investments in AI infrastructure could eclipse $1 trillion in the coming years. Nvidia is taking advantage of this windfall from increased capital expenditure (capex), underlined by investments in the European GPU cluster specialist. Nebioand the acquisition of AI infrastructure business Run:ai (which it acquired for $700 million).

Given the massive rise in Nvidia’s stock price, it’s a prudent idea to look at some of the company’s valuation metrics and compare them to the catalysts I’ve covered previously.

Data source: YCharts.

The story continues