Back in January, I predicted that Nvidia (NASDAQ: NVDA) stock would hit $200 in 2025. It was a bold call as at the time, the stock was trading at $140.
For a while there, it was looking very unlikely that this price target would be achieved this year (the stock fell below $90 in April). However all of a sudden, $200 in 2025 is looking like a real possibility.
A 21% gain from here
As I write this, Nvidia’s share price is sitting at $165. This means that to hit $200, it would have to rise about 21%.
Now, for your average stock, a 21% gain is a big move (perhaps equal to two or three years of gains). However, for Nvidia, it’s nothing.
I’ve seen this stock achieve that kind of gain in a matter of days in the past. So with nearly six months to go until the end of 2025, it could definitely happen.
Of course, we’d need a driver to see a 21% gain. However, I think we have one and that’s a renewed interest in artificial intelligence (AI).
You see, in the first half of the year, AI fell out of favour with investors. Donald Trump’s tariffs got a lot of focus and investors stopped thinking about growth industries.
Today though, AI is coming back into focus. We can see this in Nvidia’s share price – recently it has broken out of a major consolidation pattern and hit new all-time highs.
AI is hot again
Why is AI back in focus again? Well the main reason is that spending on this area of technology continues to be huge.
Just look at what Meta Platforms has been doing. Recently, it paid a whopping $14.3bn to buy Scale AI. It has also been offering $100m sign-on bonuses to recruit AI specialists.
Alternatively, take a look at Taiwan Semiconductor (which manufactures Nvidia chips). It recently reported year-on-year revenue growth of 39% for the second quarter of 2025, which suggests that AI chip demand is very high.
The recent AI news from Saudi Arabia (it plans to buy a ton of Nvidia chips) is also worth highlighting. This shows that countries are taking AI very seriously.
If the AI theme continues to be hot in the months ahead, I expect Nvidia’s share price to climb.
‘Blue-sky’ territory
It’s worth noting that if we look ahead to next financial year (starting in February 2026), Nvidia’s valuation looks quite reasonable today. Currently, the consensus earnings per share forecast for that year is $5.81. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of just 28.4. I see room for expansion there.
Of course, Nvidia is a volatile stock. And so we may not see $200 in 2025. If spending on AI drops, or competitors release powerful new AI chips, the share price could go into reverse.
I think the stock is going higher, however, and I remain convinced that it’s worth considering on pullbacks. The fact that it has broken out to ‘blue-sky’ territory is a positive as it means that there are no more long-term investors sitting on losses and waiting to sell.
