nvidia stock defies market trends with robust performance
Santa Clara, Monday, 9 December 2024.
Despite market fluctuations, Nvidia’s stock remains a standout performer. It has achieved a high Relative Strength Rating and recently saw its earnings more than double. Nvidia’s stock is consolidating near record highs, indicating potential further growth. The company holds a strong position in the market, with an IBD Composite Rating of 97 and an EPS Rating of 99. It has rebounded above a key buy point and continues to show resilience. As of early December 2024, Nvidia’s stock has nearly tripled year-to-date, demonstrating significant gains and resilience in the current quarter. Analysts note the possibility of investor fatigue, yet Nvidia’s strategic advances and robust ratings keep it as a leading stock to watch. Nvidia’s ongoing dominance in AI chips and recent earnings growth bolster its reputation as a key player in the tech market.
Market dominance and competitive landscape
Nvidia’s commanding position in the AI chip market remains formidable, holding over 85% market share [5]. The company’s strategic advantage is set to strengthen with the upcoming Blackwell processors scheduled for 2025 [2]. Recent financial performance has been exceptional, with Q2 fiscal 2025 revenue reaching $30 billion, marking a 122% increase year over year [5]. The company’s non-GAAP gross margin also improved by 4.5 percentage points to 75.7% [5].
Future growth prospects
Industry analysts project continued strong performance for Nvidia. Mizuho forecasts AI graphics card sales to increase by 8% to 10% in 2025, with expected unit sales between 6.5 million to 7 million [5]. With an average selling price of $30,000 per unit, potential revenue from AI GPUs could reach $180 billion in 2025, with data center revenue possibly exceeding $200 billion [5]. UBS Global Wealth Management notes that Big Tech’s combined capex spending of $218 billion this year and $254 billion in 2025 supports the AI investment thesis [1].
Emerging competition
While Nvidia maintains its leadership position, competition is intensifying [4]. Major tech companies like Alphabet and Amazon are developing in-house chips [7], while AMD is launching new products to challenge Nvidia’s dominance [7]. Microsoft and Meta Platforms are exploring alternative chip suppliers [7]. Despite these competitive pressures, Nvidia’s strong market position and technological advantages continue to support its stock performance [2].