Is Nvidia Stock a Buy?
Written by Geoffrey Seiler for The Motley Fool -> Nvidia 's (NASDAQ: NVDA) stock has been a huge winner each of the past two years. After surging over 238% in 2023, the stock has soared approximately 164% this year, as of this writing. Those are two huge back-to-back year gains
Nvidia 's (NASDAQ: NVDA) stock has been a huge winner each of the past two years. After surging over 238% in 2023, the stock has soared approximately 164% this year, as of this writing. Those are two huge back-to-back year gains that have propelled the company to become one of the largest in the world.
The question is, can the stock hit the market with a three-peat of outsized gains in 2025? Interestingly, the stock has been able to generate returns of 30% or more for three straight years on four previous occasions and returns of 50% or greater for three straight years twice. It has never had four years in a row of 30% or more returns, but it did have one stretch where its stock rose by 25% or more for five straight years from 2013 to 2017.
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Let's look at why I think Nvidia can turn in another year of strong performance in 2025.
Any investment in Nvidia centers around spending on artificial intelligence (AI) infrastructure. The graphics processing units (GPUs) that it designs have become the backbone of the AI infrastructure buildout, as GPUs can perform many calculations at the same time, making them ideal for use in training large language models (LLMs) and running AI inference .
Meanwhile, as AI models become more sophisticated, they need exponentially more computing power, and thus GPUs, to advance. For example, both Amazon 's Llama 4 LLM and xAI's Grok 3 model were trained on 10 times as many GPUs as their predecessors trained on.
Demand for GPUs is being driven by large hyperscale (companies with massive data centers) tech companies (such as Microsoft , Alphabet , Amazon, and Meta Platforms ) as well as well-funded AI start-ups like OpenAI and Elon-Musk backed xAI. Currently, these companies are all racing to create the best and most powerful AI models, leading to what Nvidia has called "insane" demand for its newest-generation Blackwell GPUs.
However, growth is not expected to stop, with Nvidia's largest customers, by and large, indicating that they plan to spend more on building out data centers to help power their AI ambitions. Nvidia customers such as Meta Platforms and Alphabet have said the biggest risk with AI infrastructure is underinvesting, as they look to capitalize on what they see as a generational opportunity. Oracle , meanwhile, has said it expects strong AI infrastructure growth to continue over the next five to 10 years.
