Is Nvidia still the best stock in artificial intelligence (AI) in 2025?

Nvidia (NASDAQ: NVDA) has undoubtedly been one of (if not the) best artificial intelligence (AI) stocks to own in 2023 and 2024. With 2025 just around the corner, the question now shifts to: “Is this the best AI share for 2025?”

This question is impossible to answer because it requires me to predict the future. However, I think there are important facts about Nvidia’s business that could influence whether it will be the best AI stock in 2025.

Nvidia will sell more GPUs in 2025 than in 2024

Why is Nvidia the AI ​​leader in the first place? Simple: best-in-class graphics processing units (GPUs) power many AI models. GPUs have advantages over traditional computing methods because they can process hundreds of calculations in parallel. Additionally, thousands of GPUs can be connected in clusters to create impressive computing capabilities.

As AI models become more complex, they will require more computing power to develop. For example, Metaplatforms’ generative AI model, Llama, is currently in release phase 3.1. Work is underway to develop Llama 4, but it requires ten times more computing power than the Llama 3 model. This isn’t a problem unique to Meta; every company with its fingers in AI is still dramatically expanding its AI computing power, which is a huge advantage for Nvidia.

It’s no wonder that many big tech companies like Meta and its peers have already talked about increasing capital expenditures related to AI computing power by 2025. So Nvidia’s demand will still be growing in 2025 at the very least.

This is crucial, because Nvidia has already priced in a lot of success.

Nvidia’s shares are the most expensive during their run

While Nvidia has rarely been cheap in the last two years, it is currently the most expensive ever.

NVDA PE ratio data (1 year forward) according to YCharts

This chart is a one-year price-to-earnings ratio and prices the stock based on the next fiscal year’s earnings (in this case, fiscal year 2026, ending January 2026). Nvidia has never been this expensive during its run, which means it still has high expectations for next year.

Although Nvidia management has not provided official guidance for fiscal year 2026, Wall Street analysts are already working on it. For fiscal year 2026, an average of 59 analysts expect revenues of approximately $193 billion, which represents revenue growth of 49%. That’s still incredibly impressive, considering Nvidia’s revenue is soaring in 2023 and 2024.

But is it enough to justify the most expensive price tag Nvidia has traded for during its run? That depends on what you think will happen in 2026.

What happens in 2025 may be determined by the 2026 projections

If you only looked at Nvidia’s price-to-earnings ratio (P/E), you would never have thought the price made sense. That’s because investing in Nvidia is all about where it might go. So it makes sense that many investments in 2025 will be based on what 2026 has in store.

There are a few thinking camps here:

1. The first is that the AI ​​buildout is far from complete. As a result, Nvidia’s customers will continue to buy up GPUs to expand their computing power. This idea seems reasonable, because we’re just scratching the surface of what’s possible with AI. The result is that we have no idea how much there is left to gain.

2. The second thought is that 2025 will be the peak in demand for AI computing power, and Nvidia sales will go south in 2026. If this happens, the bottom could fall out of Nvidia stock as investors quickly book profits.

3. Finally, there is a combination of the two, with 2026 essentially being a repeat of 2025. This is perhaps the most difficult scenario to predict, as most investors view the AI ​​space as a boom or bust and not a stagnation. However, this may be the most logical conclusion, as there may be a trade-off between companies’ spending on building out AI computing resources and return on investment.

I have no idea what will happen, but I think the question will probably land between options one and three. As a result, I think Nvidia will likely be a market-beating stock in 2025, but probably not the best stock (at least from a price appreciation perspective).

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