Nvidia outperformed Amazon and the market in 2024, with strong growth potential for 2025.

From Nasdaq: 2024-12-08 06:28:00

The Dow Jones Industrial Average has seen major changes in the past five years, with Amazon and Nvidia replacing other components this year. Both companies have outperformed the S&P 500 and Dow indexes in 2024. Nvidia’s growth potential and dominance in the data center chip market make it a better buy than Amazon for 2025.

Nvidia announced its latest technologies, including its Blackwell architecture for AI, coming to AWS. Nvidia leads in chips for hyperscalers, with AWS holding a 31% market share in the cloud market. AWS’ operating income makes up a significant portion of Amazon’s total, showing the importance of the cloud business.

Nvidia’s revenue and operating income from compute and networking segments are impressive, with high margins. The company has transitioned from a graphics chip company to a data center chip leader. Nvidia’s growth potential and margins give it an edge over Amazon in terms of investment opportunity.

Nvidia’s valuation remains fair, driven by earnings growth and technological advancements. Nvidia is not a bubble but a company delivering real results. The company’s P/E ratio is higher than Amazon’s, reflecting its growth potential. Investors should consider Nvidia for the long term due to its effective business model and growth prospects.

Investors should monitor Nvidia’s pace of technological advancements and ability to monetize them. The company’s strong customer base, including AWS, supports its growth. Nvidia’s stock price is driven by earnings growth and remains a solid investment. With better growth potential and margins, Nvidia is a more straightforward investment compared to Amazon.

The Motley Fool Stock Advisor team has identified 10 best stocks for investors to buy now, with Nvidia not included in the list. Nvidia’s historical performance shows significant returns for long-term investors. The Stock Advisor service provides a blueprint for success, offering guidance on building a portfolio and regular updates on stock picks.

The author has no position in the mentioned stocks. The Motley Fool has positions in and recommends Alphabet, Amazon, Intel, Meta Platforms, Microsoft, and Nvidia. Disclosure policies apply. John Mackey, Randi Zuckerberg, and Suzanne Frey are board members of The Motley Fool. Consider long-term investment strategies when evaluating Nvidia as a potential investment opportunity.



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