The past two years have been absolutely incredible for investors in Nvidia (NASDAQ: NVDA) as shares of the semiconductor giant more than doubled in both 2023 and 2024, rising 860% since the beginning of last year thanks to the effects that artificial intelligence (AI) has had on the company’s revenue and earnings.
In December 2023, I discussed the reasons shares of Nvidia could double in 2024. These included the robust demand for its graphics processing units (GPUs) for AI model training and inference, and the steps being taken by its manufacturing partner, Taiwan Semiconductor Manufacturing (NYSE: TSM), to ramp up supply.
In this article, I will look at Nvidia’s catalysts for 2025 and check why this high-flying chipmaker could double in value once again in the new year.
The company’s latest generation of GPUs built on its Blackwell architecture will be the biggest growth driver in 2025. Management said on its November earnings conference call that these chips are in full production and are being shipped to customers.
Blackwell-related revenue for the current quarter should exceed expectations thanks to a strengthening supply chain. The company also said that the demand is well above supply. This bodes well for Nvidia going into the new year since TSMC says it will increase the production capacity of advanced AI chips significantly in 2025.
Market researcher IDC projects that TSMC is on track to double its chip-on-wafer-on-substrate (CoWoS) advanced packaging capacity to 660,000 wafers to fulfill demand from Nvidia and other AI chipmakers. Nvidia reportedly cornered 60% of TSMC’s CoWoS capacity for 2025, so it should be able to substantially increase the output of its Blackwell processors.
In October 2024, Morgan Stanley analysts said that Blackwell GPUs are sold out for the next 12 months (according to a report on the website Tom’s Hardware). That waiting time is likely to come down based on TSMC’s outlook, allowing Nvidia to satisfy more orders and deliver a big bump in data center revenue. The company is expected to ship between 60,000 to 70,000 Blackwell B200 server systems in 2025, according to Morgan Stanley. Each system is expected to cost between $2 million and $3 million. That suggests its Blackwell systems could help generate somewhere between $120 billion to $210 billion next year, or $165 billion at the midpoint.
Analysts expect Nvidia to hit $195 billion in revenue in fiscal 2026 (which will coincide with 11 months of calendar 2025), an increase of 51% from the current fiscal year’s projected revenue of $129 billion. However, the potential revenue from Blackwell sales and the fact that Nvidia will continue to sell its previous-generation Hopper chips indicate that it could easily exceed Wall Street’s growth expectations, and that could set the stage for the stock to double.
