There is little question Nvidia (NASDAQ:NVDA) has been the most consequential stock over the last two years. It has sometimes carried the entire market higher on its back. As one of the Magnificent 7 stocks that was largely responsible for the S&P 500‘s gains in 2023 and still responsible for much of the popular index’s performance this year, can it continue growing in 2025?

Shares of NVDA are up 174% this year, more than twice the gains of the second-best Mag 7 stock Tesla (NASDAQ:TSLA), which is up 74% year-to-date. And it comes on top of a tremendous 240% run the year before. As much as the market loves the artificial intelligence chipmaker, many investors wonder just how long it can keep up this outsized performance.

While data centers seem to have limitless expansion opportunities and new channels potential opening in consumer markets, there is a lot more AI chip competition now from some very strong rivals and geopolitical trade tensions could disrupt overseas markets for the semiconductor stock.

Let’s look closer at Nvidia’s growth potential in 2025 and see whether additional triple-digit gains are in the cards.

24/7 Wall St. Insights:

• Nvidia (NVDA) stock has been a market darling since AI became a mainstream phenomenon driving its shares over 800% higher for the last two years.
• There are numerous tailwinds still driving the AI chipmaker’s business forward, but headwinds are beginning to form too.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Valuation looks concerning

The 800-pound gorilla in the room is NVDA stock’s valuation. Shares trade at 54 times trailing earnings, 31 times next year’s estimates, and 29 times sales. The stock also goes for 58 times the free cash flow it produces.

On the surface these are nosebleed valuations. Yet over the past three years, Nvidia’s market multiple is in line with where Nvidia has previously traded and is below its five-year average on both a GAAP and adjusted basis. Yes, relative to sales the valuation is high, but compared to cash flows, it remains below the long-term average.

The reason is Nvidia is rapidly expanding so its exponential growth tends to offset the multiples the market has assigned it historically. Yet with more competition entering the market, can it maintain its explosive growth rate?

An increasingly crowd field

Advanced Micro Devices (NASDAQ:AMD) is often seen as Nvidia’s biggest challenger and Broadcom (NASDAQ:AVGO) has been grabbing headlines with its AI chip advances, a number of sleeper rivals are emerging on the scene, such as Marvell Technology (NASDAQ:MRVL), which has been lauded for its own developments.

Earlier this year, Marvell announced it had won a third hyperscale customer for its AI solutions, believed by most to be Microsoft (NASDAQ:MSFT), which would join Amazon (NASDAQ:AMZN) and Alphabet‘s (NASDAQ:GOOG)(NASDAQ:GOOGL) Google. Many of these hyperscalers are pointedly trying to diversify away from their reliance upon Nvidia chips.

Yet the market is growing so rapidly that there is seemingly plenty of business to go around. The giants continue to suck up all of the AI chips Nvidia is able to produce while supplementing their purchases with new suppliers.

Robust demand remains intact

Nvidia’s next-generation Blackwell chip is scheduled to hit the market early in the first quarter, which could spark a new round of frenzied buying by its customers. CEO Jensen Huang has already said demand for the Blackwell chip is “staggering.”

As demand remains well above supply, Nvidia should profit handsomely in the new year as Taiwan Semiconductor Manufacturing (NYSE:TSM) has promised to increase the production capacity of advanced AI chips significantly next year.

This past October, Morgan Stanley analysts indicated Blackwell chips are sold out for the next year.

Key takeaways

Wall Street is looking for Nvidia sales and profits to both rise by 50% or more in 2025. Analysts have steadily increased their estimates for next year and beyond over the last three months. Arguably the biggest concern is the rate of Nvidia’s growth.

Where EPS growth peaked at 124% in fiscal 2024, the current fiscal year forecasts see growth at less than half that rate with it more than halving again in fiscal 2026. While no one can maintain a triple-digit trajectory, this slowdown could weigh on NVDA stock performance.

Because of Nvidia’s growth rate moderation, I foresee its stock gains easing as well. The chipmaker is likely still to be a top performer, but it may be difficult for NVDA shares to double again in 2025.

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