Nvidia Stock Is Surging Today -- Is the AI Leader's Stock a Smart Buy for 2025?
Nvidia's stock surged 4.7% today, driven by strong demand for AI hardware, as indicated by Foxconn's record revenue report. Anticipation builds for CEO Jensen Huang's keynote at CES, where new products may be unveiled. Nvidia's stock has risen 208% over the past year, and with Microsoft's projected $80 billion AI data center investment in 2025, the outlook for Nvidia remains positive. Investors see Nvidia as a smart buy, given the ongoing strong demand for high-end AI hardware.
Nvidia (NVDA 4.75%) stock is seeing strong gains in Monday's trading. The company's share price was up 4.7% as of 12:30 p.m. ET. Meanwhile, the S&P 500 (^GSPC 1.00%) was up 1.1%, and the Nasdaq Composite (^IXIC 1.49%) was up 1.6%.
Nvidia stock is climbing today following a fourth-quarter report from Foxconn (otherwise known as Hon Hai Precision Industry) that suggests demand continues to be very strong in the artificial intelligence (AI) hardware space. The graphics processing unit (GPU) leader's share price is also gaining ground thanks to excitement surrounding CEO Jensen Huang's keynote speech at the CES conference tonight.
Is Nvidia on track to deliver big wins in 2025?
Foxconn published its fourth-quarter results before the market opened this morning, reporting record revenue. The tech manufacturing company said that strong demand for AI server hardware helped power impressive growth for its cloud-and-networking products segment. Nvidia is one of Foxconn's largest and most visible customers, and it's also the leading provider of GPUs used for AI servers, so it's reasonable to see the manufacturer's record sales results as a bullish indicator for the artificial intelligence leader.
Investors are also looking forward to Huang's presentation at CES, scheduled to take place at 9:20 p.m. EST tonight. Nvidia has often used CES as an occasion to roll out and spotlight new products. While Huang's presentation will likely heavily feature consumer-facing products, including new graphics cards for gaming, it wouldn't be surprising to see him also spend some time discussing the company's upcoming, ultra-advanced GB300 AI processor or robotics initiatives.
Nvidia stock has been on an incredible winning streak. With today's gains, the stock has officially hit a new high -- and the company's share price is up 208% over the last year alone. While the stock could see some volatile moves in the near term depending on whether what's shown at CES tonight lives up to expectations, the long-term outlook remains promising.
Last Friday, Microsoft published a blog post that outlined plans to spend roughly $80 billion building out AI data centers in its 2025 fiscal year. For comparison, the software giant is projected to spend $53 billion in total on capital expenditures in 2024. Microsoft is Nvidia's largest customer, and Nvidia's GPUs are the fundamental hardware for training and running advanced AI applications.
So is Nvidia stock a buy?
As Nvidia's largest customer, Microsoft's AI spending guidance is a very bullish indicator and suggests that the demand backdrop for high-end AI hardware remains very strong. With signs that investment in AI infrastructure is still in a relatively early stage of its long-term trajectory, Nvidia stock continues to look like a smart buy in 2025.