Nvidia (NASDAQ: NVDA) was the best-performing stock in the entire S&P 500 (SNPINDEX: ^GSPC) in 2023, ending the year with a 239% gain. It's up a further 181% so far in 2024, but that isn't enough to lead the index -- first place is currently held by Vistra Corp.
However, a 181% gain is enough to place Nvidia ahead of every other company worth $1 trillion or more.
Nvidia's incredible run of performance comes on the back of surging demand for its graphics processing units (GPUs) for data centers, which are the go-to choice among developers of artificial intelligence (AI) models.
The company is about to start shipping its next generation of AI GPUs based on its latest Blackwell architecture, which will reset the benchmark for the entire industry. Nvidia CEO Jensen Huang says Blackwell demand is already "insane," and I predict this new hardware will be the reason its stock outperforms the rest of the trillion-dollar club yet again in 2025.
Nvidia's H100 GPU set the benchmark for AI training and inference. The chip went into production in late 2022, and it was the top choice throughout 2023 for data center operators like Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL).
Nvidia has since released the H200 GPU, which can perform AI inference at almost twice the speed of the H100. But Blackwell-based GPU systems like the GB200 NVL72 are capable of performing AI inference at a whopping 30 times the pace of the equivalent H100 setups.
Plus, Huang says individual GB200 GPUs will sell for $30,000 to $40,000 each, which is around the same price many data center operators paid for the H100 when it was released. In other words, Blackwell is going to offer a substantial increase in cost efficiency. That means the largest and most advanced AI models will become financially accessible to a wider number of developers and businesses.
In an interview with CNBC in early October, Huang said demand for Blackwell GPUs is "insane." According to one analyst, Nvidia could ship up to 200,000 GB200 units in the final quarter of 2024, followed by as many as 550,000 units in the first quarter of 2025. That could translate into as much as $30 billion in data center revenue over the next two quarters from that one chip alone!
Nvidia's fiscal year is different from the traditional calendar year. The company is currently in fiscal 2025, which will end on Jan. 31, 2025 (three months from now). That will then mark the beginning of its fiscal 2026 year.