Why Nvidia Stock Skyrocketed 171.2% in 2024 but Is Losing Ground in 2025

Nvidia (NASDAQ: NVDA) stock posted another year of explosive gains in 2024. The company's share price closed out the year's trading up 171.2%, according to data from S&P Global Market Intelligence.

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NVDA data by YCharts

Nvidia continued to see very strong demand for its graphics processing units (GPUs) for artificial intelligence (AI) last year. The company delivered four quarters of sales and earnings beats, and its valuation also soared in conjunction with bullish coverage from analysts, new growth initiatives, and the company's stock split.

Nvidia stock delivers another fantastic performance in 2024

Nvidia continued to command a dominating position in AI processors last year. With tech companies increasing their spending on AI infrastructure, Nvidia delivered another year of strong sales and earnings reports.

The company managed to beat the average Wall Street sales and earnings targets with each of the four quarterly reports it published in calendar 2024. The table below breaks down the company's top-line performances compared to the average analyst estimates.

Data sources: Nvidia and CNBC.

With the business continuing to post very strong margins, sales beats meant that the company's quarterly reports also arrived with earnings results that came in well ahead of Wall Street's targets.

In addition to fundamental performance catalysts, Nvidia stock also got a lift from a stock split last year. The company announced a 10-for-1 stock split on May 22 and immediately saw an uptick in bullish momentum. The company's split was carried out on June 10. While its stock didn't immediately see big gains following the completion of the move, it did see subsequent valuation increases that may have been aided by the split.

Why is Nvidia stock losing ground in 2025?

Nvidia stock actually saw gains early in 2025 thanks to news from Microsoft about its plans for AI infrastructure spending this year. On Jan. 3, Microsoft published a blog post stating that the company planned to spend roughly $80 billion this year to build out its AI data center capabilities. Nvidia's GPUs are the foundational hardware element powering today's most advanced AI training systems and applications, and it likely stands to be the largest beneficiary of Microsoft's big spending push.

But Nvidia stock has subsequently seen pullbacks in conjunction with macroeconomic pressures and geopolitical risk factors. As of this writing, the company's share price is down roughly 1.5% across 2025's trading.

On Jan. 10, the Bureau of Labor Statistics published U.S. jobs numbers for December. The report showed that the U.S. economy added 256,000 jobs last month, which came in far ahead of the average forecast for additions of 155,000 jobs in the period. The higher-than-expected jobs growth raised concerns that inflation could be trending higher than investors and economists anticipated. If so, that makes it less likely that the Federal Reserve will cut interest rates and create a more favorable backdrop for growth stocks.

Nvidia stock is facing another bearish pressure following news that the U.S. will expand its restrictions on the export of advanced AI chips to China and other rival nations. Export bans were already in place that prevented Nvidia's most advanced processors from being sold to China, but it looks like the severity and breadth of limitations is poised to increase significantly in the near term.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.