NVIDIA stock rises 2.5% as Meta Platforms and Microsoft increase AI investment
From Nasdaq: 2025-05-05 09:18:00
Zacks.com highlighted NVIDIA Corp. stock gaining nearly 2.5% due to increased AI investment from Meta Platforms, Inc. and Microsoft Corp., boosting optimism. With NVIDIA’s stock down 27%, the question arises: should investors hold or buy more? Both companies are committing billions to AI infrastructure, signaling continued demand for NVIDIA’s chips.
Microsoft and Meta Platforms are maintaining massive capital expenditure plans for AI infrastructure, with a significant portion directed towards U.S. operations. Meta Platforms increased its 2025 spending outlook to $64-$72 billion for data center expansion and AI infrastructure, both heavily reliant on NVIDIA’s GPUs. Microsoft and Meta’s commitments suggest ongoing demand for NVIDIA’s high-performance chips.
NVIDIA continues to thrive in the AI revolution, with revenues from the data center end-market growing 93% year over year to $35.58 billion in Q4 of fiscal 2025. The company’s financial performance is robust, with revenues surging 78% year over year in Q4 and a projected revenue increase to $43 billion in Q1 of fiscal 2026. Analysts forecast continued revenue and earnings growth for NVIDIA in fiscal 2026 and 2027.
Despite its strong performance, NVIDIA is considered overvalued, with a Zacks Value Score of D. However, its forward 12-month Price/Sales ratio is higher than the Semiconductor – General industry average. The AI megatrend, supported by Meta Platforms and Microsoft, underscores NVIDIA’s importance in the tech landscape. While vulnerable to short-term volatility due to valuation, holding NVIDIA stock is recommended for now.
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Read more at Nasdaq: The Zacks Analyst Blog Highlights NVIDIA, Meta Platforms and Microsoft