Can Nvidia Sustain Its AI-Fueled Surge as Stock Price Nears Record High?

Nvidia (NVDA) shares roseate again Wednesday, approaching nan grounds precocious group past month, arsenic nan chipmaker continues to use from investor enthusiasm astir nan company's beardown position during nan artificial intelligence era.

The company's AI-fueled summation has sent it into nan $3 trillion marketplace capitalization club, an accomplishment only antecedently reached by Microsoft (MSFT) and Apple (AAPL), successful grounds time. The mobility connected nan minds of galore is: really tin nan institution and banal prolong their monumental growth?

Analysts astatine Truist Securities, successful a study released Wednesday, examined nan mobility of "how nan biggest tin get bigger," uncovering that earnings per stock (EPS) growth driven by expanding integrated income will apt beryllium really Nvidia continues its rise.

The analysts highlighted really different mega marketplace headdress stocks, specified arsenic Apple, Microsoft, and Amazon (AMZN), They said that while these stocks suffered a contraction successful price-to-earnings ratio, they "still outperformed nan S&P by delivering beardown EPS growth."

Organic Sales Growth Supports Outperformance

Nvidia has consistently blown distant investors' expectations connected gross and net successful caller quarters.

In May, Nvidia reported grounds gross of $26.04 cardinal for its fiscal 2025 first quarter, much than triple what it was successful nan year-ago period, while EPS came successful astatine $5.98 compared to 82 cents. The apical and bottommost statement numbers some easy surpassed analysts' estimates.

"We do person comparative assurance that NVDA will proceed to turn gross (& EPS) organically faster than nan S&P," nan Truist analysts wrote successful nan caller report.

Demand For AI Chips Continues Growing

Surging request for AI-related hardware could prolong Nvidia's performance.

Truist analysts highlighted nan near-term upside imaginable fixed that "NVDA's proviso concatenation is gearing up to present $150-200B of datacenter sales" successful 2025. Amid nan ongoing AI boom, Nvidia has been incapable to support up pinch surging request for its information halfway products.

The analysts said while "AI server gross maturation is feverish (we estimate ~70% this year), portion maturation is conscionable getting going" arsenic it's still early successful nan AI era.

Big Expectations for Blackwell Platform

Another constituent that could support maturation is Nvidia's displacement to offering "truly afloat stack solutions" alternatively than simply chips arsenic they did successful nan past. The analysts said they "expect this move was a awesome facet successful NVDA's gross & EPS acceleration" complete nan past 4 quarters, and they "expect that inclination to continue."

Nvidia's upcoming Blackwell platform offers full-stack solutions, supporting nan information halfway needs required to train and tally AI workloads. Blackwell is already successful precocious demand and is expected to thrust nan chipmaker's growth.

The analysts besides noted that AI astatine nan edge, wherever AI computing is done on-device alternatively than done a third-party server, could beryllium "a comparatively overlooked area of AI adoption." They said that Nvidia's maturation successful nan AI separator marketplace could adhd different $100 cardinal marketplace for nan company.

Nvidia shares were up 2.5% astatine $134.72 successful day trading Wednesday, approaching their all-time closing precocious of $135.58 group connected June 18. The banal has gained 172% truthful acold successful 2024.