nvidia named top stock pick by bank of america for 2025
New York, Sunday, 22 December 2024.
Bank of America has highlighted NVIDIA as a leading investment choice for 2025. The financial giant praises NVIDIA’s strong position in artificial intelligence and semiconductor technologies. With its robust performance and innovative edge, NVIDIA stands out as a preferred option for investors. This recommendation comes amidst NVIDIA’s recent stock fluctuations, including a rise after the Federal Reserve signaled fewer rate cuts in 2025. Despite recent challenges, like increased competition in AI processors, NVIDIA maintains a promising outlook. Analysts forecast significant growth in both sales and earnings per share over the next two years. Additionally, with NVIDIA’s replacement of Intel in the Dow Jones Industrial Average, the company’s influence and market presence continue to expand. Bank of America’s endorsement underscores NVIDIA’s potential to thrive in the evolving tech landscape, making it a focal point for risk-tolerant investors in the coming year.
Market performance and technical analysis
NVIDIA’s stock has shown resilience despite recent market volatility. The company’s shares experienced a 2% increase on December 19, 2024, though remaining 15% below their all-time high [2]. A significant technical development occurred when the stock fell below its 50-day moving average for the first time since September 12, 2024 [2]. After reaching a peak of 152.89 following a breakout at the 140.76 buy point in October, the stock has retreated more than 7% from this level [2].
Competitive landscape and AI dominance
While competition intensifies in the AI chip market, as evidenced by Broadcom’s strong performance [2], NVIDIA maintains crucial advantages. Citi analyst Atif Malik emphasizes NVIDIA’s superior capabilities in handling diverse workloads and its proprietary Cuda software [2]. The company’s CoWoS foundry capacity is projected to expand from 56% in 2024 to 60% in 2025 [2]. Morgan Stanley analyst Joe Moore predicts substantial revenue potential from NVIDIA’s Blackwell chip, estimating $5 billion to $6 billion in the January quarter [2].
Financial outlook and growth projections
NVIDIA’s financial performance continues to impress analysts. The company’s Q3 2024 earnings reached $35.08 billion with earnings of $0.81 per share, exceeding expectations of $33.17 billion in sales and $0.75 EPS [2]. Looking ahead, analysts project compound growth rates of 35.5% in sales and 35.1% in EPS over the next two years [2]. Piper Sandler has raised NVIDIA’s price target from $140 to $175, anticipating a 20% upside and forecasting a $70 billion AI accelerator market by 2025 [2].