This artificial intelligence (AI) company hit a $2 trillion valuation last year, and Wall Street thinks it could go much higher by 2025

Last year was another great year, especially for technology stocks. The tailwind, powered by artificial intelligence (AI), helped the S&P500 higher by 23%, while the Nasdaq Composite achieved an impressive 29%.

The “Beautiful seven“Shares were among the market’s biggest gainers of the year, and perhaps none attracted more attention than the semiconductor sector leader. Nvidia – the best performing stock in the Dow Jones Industrial Average in 2024.

Last year, Nvidia achieved approximately $2.1 trillion in market capitalization – the highest of any company. This made Nvidia one of the most valuable companies in the world. While Nvidia’s current run might indicate the stock is due for a pullback, Wedbush Securities technology analyst Dan Ives is calling for significantly more growth for the AI ​​darling — and I agree.

Let’s take a look at Nvidia’s latest catalysts and make the case for why 2025 could be another one for the record books.

Over the past two years, Nvidia has emerged as the leader in the AI ​​marathon, and it all comes down to one thing: graphics processing units (GPUs). GPUs are advanced chipsets required for developing generative AI applications.

Nvidia’s extensive range of GPUs has helped the company differentiate itself from competitors such as Advanced micro devicesand get one estimated 90% of the GPU market.

To add some context to this, Nvidia’s dominance has led to consistent revenue and profit growth for the company, allowing it to redouble its research and development (R&D) efforts and even pioneer newer, innovative products . Meet Blackwell, Nvidia’s next-generation GPU architecture, which is reportedly already sold out in the next twelve months.

While this is more of a company-specific tailwind, Ives believes broader investment in AI infrastructure could exceed $1 trillion in the coming years. Nvidia benefits from this windfall from rising capital expenditure (capex), underlined by investments in the European GPU cluster specialist Nebiusand the acquisition of AI infrastructure company Run:ai (which it acquired for a reported $700 million).

Given the meteoric rise in Nvidia’s share price, it’s a wise idea to look at some of the company’s valuation metrics and compare them to the catalysts I discussed above.

Data source: YCharts.

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