Nvidia stock has been trending sideways for about four months as investors debate uncertainties ranging from the sustainability of data center demand for artificial intelligence chips to the impact of the new Trump administration.
Nvidia shares have wavered up and down on every news report about supply and demand for the chipmaker's current-generation Blackwell series products.
Still, Wall Street analysts are generally positive about Nvidia's prospects this year. According to FactSet, 61 analysts have buy ratings on Nvidia stock, while five have hold ratings. No analysts have a sell rating on it.
Nvidia stock hit a record high of 153.13 on Jan. 7 after Chief Executive Jensen Huang gave the opening keynote address at the CES 2025 technology conference in Las Vegas. During his speech, Huang outlined the coming shift from generative artificial intelligence to agentic AI and physical AI.
But the euphoria over Huang's speech quickly faded over lingering concerns about whether hyperscale cloud computing customers will slow their purchases of AI processors.
Investors will glean insights on AI data center demand from upcoming Big Tech earnings reports. Meta Platforms and Microsoft are due to report December-quarter results on Jan. 29. Apple will follow on Jan. 30. Google parent Alphabet will release its fourth-quarter results on Feb. 4. Amazon.com will post its fourth-quarter results in early February.
Possible Catalysts For Nvidia Stock
Nvidia's next earnings report — for its fiscal fourth quarter — is due on Feb. 26.
After that, the next potential catalyst for Nvidia stock will be announcements at the company's GTC conference, which starts March 18, in San Jose, Calif.
Meanwhile, Nvidia faces potential business challenges from changes in U.S. policy under President Donald Trump, who took office on Monday.
Nvidia was critical of recent export restrictions on AI chips and systems under former President Joseph Biden. And President Trump has threatened to impose steep tariffs on imports that could impact Nvidia's products.
AI Chip Competition
Nvidia also faces the threat of increased competition from custom AI chips from Broadcom and Marvell Technology.
The AI chip market is big enough to support graphics processing units, or GPUs, from Nvidia as well as application-specific integrated circuits, or ASICs, Barclays analyst Tom O'Malley said in a client note Friday.
"Nvidia GPU sales reached nearly $100 billion in calendar 2024 and are expected to grow to about $160 billion in calendar 2025," O'Malley said. "Custom silicon is just starting to become more significant and should grow at a faster compounded rate over the next three years (55%). We think the AI TAM (total addressable market) is big enough to support both through 2026."
Customers are clamoring for "second-source options" for AI computing systems, O'Malley said. That includes merchant GPUs from Advanced Micro Devices and custom chips from Broadcom and Marvell, he said.
"While we continue to expect Nvidia to dominate training workloads, we see custom ASICs as an increasingly compelling solution for inference workloads," he said.
AI training is the process of teaching an AI model to recognize patterns and make predictions, while AI inference is when the model uses that training to make predictions on new data.
O'Malley predicts that the custom ASIC portion of the inference accelerator market will reach 45% of total spending in the segment by 2028, up from 7% now.
Nvidia Stock Gets Price-Target Hike
"Given the ongoing focus on the AI compute end-market, we would be remiss to not mention Nvidia's continued upside potential," O'Malley said. "For calendar 2025, we expect Nvidia to grow its data-center compute business by nearly 60% year over year."
O'Malley reiterated his overweight, or buy, rating on Nvidia stock and upped his price target to 175 from 160.
On the stock market today, Nvidia stock advanced 2.3% to close at 140.83.
Investor fears around a range of issues hanging over Nvidia stock "seem overdone," O'Malley said. Those issues include rumored production snags and slowing demand for prior-generation Hopper systems.
Nvidia A Full-Stack AI System Provider
Evercore ISI analyst Mark Lipacis maintained his outperform rating on Nvidia stock with a price target of 190.
"We continue to favor Nvidia, as a dominant, full-stack, AI-ecosystem play, but also expect upside surprises in 2025 from the custom-AI chip plays — Marvell, Broadcom, Arm, Teradyne and Astera Labs," Lipacis said in a client note Friday.
In 2024, Nvidia stock rose 171% to end the year at 134.29.
D.A. Davidson analyst Gil Luria has been neutral on Nvidia stock for the past year. He says he has taken flak for his guarded stance on the AI chipmaker.
"Another takeaway from this past year is that when your appearance relaying a cautious outlook on Nvidia gets posted online never check the comments," he said in a Jan. 15 report. "People are not very nice online."
He maintains a neutral rating on Nvidia stock with a price target of 135.
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