Meta Platforms Just Hinted That Nvidia Is Going to Have a Monster 2025

As we enter the final quarter of 2024, some investors might be thinking about how they want to position their portfolio heading into 2025. This includes assessing winners and losers, and if you bought Nvidia (NASDAQ: NVDA) stock at the start of the year, you're sitting on some nice gains.

With the stock rising around 150% so far in 2024, investors would be forgiven for thinking that it couldn't rise any higher. However, some hints on other companies' conference calls indicate that 2025 will be just as good a year for the company as 2024 has been. The question is, will the stock see the same benefit?

Meta is going to buy a bunch more GPUs in 2025

Nvidia's incredible rise has been tied to the artificial intelligence (AI) arms race. Its primary product is the graphics processing unit (GPU), which can be used to perform multiple calculations in parallel. Additionally, companies don't just buy one or two of these units. Instead, they buy them by the thousands. This gives AI researchers ridiculous computing power and allows them to train AI models quickly.

As these models get more complex, the amount of time it takes to train them rises exponentially. Take Meta Platforms' (NASDAQ: META) Llama generative AI model, for instance. The current iteration is Llama 3.1, but Meta has already started training Llama 4. However, CEO Mark Zuckerberg noted that the training time for Llama 4 will likely be 10 times as long as it took to train Llama 3. Beyond Llama 4, the training time will likely increase again.

This isn't just a Meta problem. OpenAI's ChatGPT, Alphabet's Gemini, and other generative AI models will experience the same phenomenon as these models improve and become more complex.

Do you think these AI innovators will just wait 10 times longer for their next AI model to train? Probably not. Instead, they'll increase their computing power to speed up the process, significantly benefiting Nvidia.

In its Q2 earnings release, Meta also commented that its infrastructure cost expense will significantly rise in 2025. This is clearly tied to its computing power build-out to create the best AI model it can. Nvidia will be a primary beneficiary of this, making it an intriguing stock for 2025.

Nvidia should have strong growth in 2025

Nvidia also has some tricks up its sleeve for 2025. Its Blackwell technology is expected to launch and, according to CEO Jensen Huang, provides 3 to 5 times more AI throughput in a power-limited data center than Hopper, Nvidia's current architecture. That's a big deal, and Blackwell could become a new source of revenue growth for Nvidia. Currently, demand for Blackwell is "well above supply," according to management.

This is just part of the reason why Wall Street analysts believe that Nvidia can grow fiscal year 2026 (ending January 2026) revenue by 42%. It also expects strong earnings growth, with earnings per share (EPS) expected to rise from $2.84 in fiscal 2025 to $4.02 in fiscal 2026. At today's prices, that would value the stock at around 30 times fiscal 2026 earnings.

Considering Nvidia's growth, that's not a terrible price to pay for the stock if it can keep up its business past fiscal 2026.

Looking one year out is hard enough, but looking two years out is considerably harder. The major question is whether the demand for Nvidia's GPUs will last past fiscal 2026. If it won't, then Nvidia's not worth buying here. But if it does, Nvidia's stock could be a great purchase right now.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.