Where Will Nvidia Stock Be in 2025?

The red-hot rally that started in shares of Nvidia (NASDAQ: NVDA) toward the end of 2022 is now almost two years old, and the chip giant has delivered 11x gains during this two-year period.

So, an investment of just $100 made in Nvidia stock a couple of years ago is now worth more than $1,100. More importantly, it appears that the company's phenomenal run could be sustainable in 2025 as well, thanks to the developments in the artificial intelligence (AI) chip market.

Here, we will take a closer look at the reasons why Nvidia's stunning run may continue next year.

Strong Blackwell demand and improving supply will be tailwinds for Nvidia next year

Consensus estimates forecast Nvidia to end the ongoing fiscal year 2025 with $125.5 billion in revenue, which would be a 125% increase from the previous year. However, analysts at KeyBanc are forecasting the company's revenue to come in at $130.6 billion in the current fiscal year (which will end in January 2025).

KeyBanc points out that Nvidia is on track to deliver stronger growth this year thanks to the sales ramp of its new Blackwell AI processors. That's not surprising, as Nvidia management pointed out on the recent earnings conference call that it expects "to get several billion dollars in Blackwell revenue" in the fourth quarter of fiscal 2025.

At the same time, Nvidia believes that the sales of its current-generation Hopper chips, the H100 and H200 processors, are on track to increase in the second half of fiscal 2025 on the back of strong demand and improved supply. KeyBanc analysts also point out that the demand for these Hopper chips is extremely strong.

Even better, Nvidia's suppliers are taking steps to ensure that the chip giant is able to fulfill more orders. For instance, contract electronics manufacturer Foxconn has announced that it is building the world's largest production facility for Nvidia's GB200 Grace Blackwell Superchip. This particular chip consists of two of Nvidia's B200 Tensor Core GPUs (graphics processing units) that are connected to its Grace CPU (central processing unit).

Each Nvidia GB200 Superchip is expected to be priced between $60,000 to $70,000. More importantly, the server systems manufactured using multiple GB200 Superchips are in robust demand. Nvidia reportedly increased its orders for the Blackwell GPUs by 25% in July this year, and Foxconn's announcement suggests that demand remains robust.

Market research firm TrendForce estimates that Nvidia could ship 60,000 units of GB200 NVL36 servers next year, and this particular configuration reportedly commands an average selling price of $1.8 million. What that means is that Nvidia may be able to sell $108 billion worth of its GB200 NVL36 servers next year.