Nvidia shares have crushed the market in the past five years.
The company’s management team believes AI spending will balloon in the years ahead.
As a dominant force in the data center GPU market, Nvidia is positioned to benefit.
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There isn’t a business out there that has represented the ongoing artificial intelligence (AI) boom like Nvidia (NASDAQ: NVDA) has. It’s the leading infrastructure provider, with its powerful graphics processing units (GPUs) powering AI training and inference. The company has experienced incredible demand.
As a result, Nvidia shares have catapulted higher, up 1,340% just in the past five years (as of Sept. 19). It’s a good idea to remain bullish even after that kind of gain. Here’s one reason why you should consider buying this AI stock before the end of 2025.
Image source: Getty Images.
Technology companies are spending lots of money to build out their AI capabilities, to the tune of hundreds of billions of dollars just this year. There’s much more where that came from.
Nvidia’s CFO, Colette Kress, said on the latest earnings call that the management team expects $3 trillion to $4 trillion of AI spending by the end of the decade. This is a truly gargantuan sum. At the midpoint of $3.5 trillion, it represents 3.2% of the global economy’s 2024 GDP of $111 trillion.
Nvidia dominates the market for data center GPUs. It will be a big beneficiary of all this spending that is about to happen, which will continue to push up revenue and earnings. While there might be some cyclicality over any shorter period of time, due to macro headwinds that might appear, the fact that no business wants to get left behind in the AI race means that huge investments will be made.
That’s the key reason to seriously consider buying Nvidia shares before 2025 comes to a close.
Before you buy stock in Nvidia, consider this:
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