Introduction
In our previous article, we listed the 10 Hottest Mega-Cap Stocks of 2025, and in this piece, we will delve deeper into where Nvidia Corporation (NASDAQ:NVDA) stands against other top mega-cap stocks. The AI hype that dominated 2024 has led to a significant increase in spending on Artificial Intelligence infrastructure, with semiconductor stocks leading the charge.
The Rise of AI-Driven Hype
In 2024, companies poured millions into AI infrastructure, hoping to outpace their competitors in the AI race. This resulted in the communication services and information technology sectors leading large-cap stocks in terms of returns. The S&P’s large-cap index even registered two consecutive years of 20%+ gains for the first time since 1998.
The Year of Reckoning for AI?
However, some analysts have questioned the massive AI spending throughout last year. But their concerns were dealt a reality check when Bill Gates’ tech giant announced plans to spend $80 billion on AI in fiscal 2025. Consequently, semiconductor stocks rallied, reminding everyone that the AI rally wasn’t over by any means.
Nvidia Corporation (NVDA) – A Leading Player
Not surprisingly, chipmakers dominate our list of hottest mega-cap stocks of 2025. We believe these companies will be critical to the market’s returns this year. To come up with our top picks, we considered stocks with at least $75 billion in market capitalization.
Is Nvidia Corporation (NVDA) the Hottest Mega-Cap Stock of 2025?
Nvidia Corporation (NASDAQ:NVDA)
Nvidia Corporation (NASDAQ:NVDA) is poised to become one of the most valuable companies by market cap. While there are multiple ways to determine a company’s financial value, it is hard to put a price on the impact that a company like Nvidia commands.
GPUs and AI Demands
Nvidia makes some of the best GPUs in the world, which have been instrumental in training Large Language Models. These GPUs weren’t originally designed for AI tasks but have proven to be essential in this field. This year, Nvidia will roll out its Blackwell line of GPUs, which are specifically designed to meet AI demands.
Potential Branching Out
Much of the impact is already priced into the stock, but there’s still a chance that Nvidia could branch out to other sources of revenue. The company might explore building its own cloud business and robotics, which will keep the stock relevant throughout the year.
Analysts’ Views
Analysts are bullish on the stock, with Bank of America revealing that it was the most widely owned company among US fund managers in 2024. Nvidia also attracted record retail investors’ funds last year and was the most sought-after stock by this investor group.
Conclusion
While Nvidia Corporation (NASDAQ:NVDA) is an excellent AI investment, our conviction lies in believing that some other stocks hold greater promise for delivering higher returns within a shorter time frame.
Alternative Options
If you’re looking for an AI stock as promising as NVDA but trading at less than 5 times its earnings, we recommend checking out our report on the cheapest AI stock. You can also explore our list of 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure
This article is originally published at Insider Monkey and is not affiliated with any external links or resources.
Related Topics
- AI Hype
- Semiconductor Stocks
- Nvidia Corporation (NVDA)
- Artificial Intelligence Infrastructure
- Large Language Models Training
Further Reading
If you want to learn more about the hottest mega-cap stocks of 2025, we recommend checking out our previous article on 10 Hottest Mega-Cap Stocks of 2025. You can also explore our list of Best Wide Moat Stocks and Most Important AI Stocks.
