Prediction: Nvidia Stock Will Soar in the Second Half of 2025, Thanks to This Incredible News From Microsoft and Meta Platforms
Artificial intelligence (AI) is the driving force behind Nvidia's blistering growth, but investors have been wary about the future of AI.
Meta Platforms and Microsoft just reported blockbuster results, which illustrate the staying power of AI.
There's another catalyst that could fuel Nvidia's run in the second half of the year.
10 stocks we like better than Nvidia ›
Nvidia (NASDAQ: NVDA) has been the poster child for the AI revolution, with the stock on a marathon that has increased its stock price by more than 1,000% since the dawn of artificial intelligence (AI) in early 2023. In recent months, however, investors have been more circumspect, plagued by a moratorium on AI chip sales to China and the potential impact of broad-based tariffs on the economic landscape. Furthermore, the ebbs and flows of AI adoption have some investors concerned that the low-hanging fruit has been picked and the AI revolution will stall.
Experts generally agree that the adoption of AI, in some form or fashion, will continue well into the next decade, but investors have been seeking reassurance. Two of Nvidia's largest customers released their respective quarterly financial reports after the market close on Wednesday. Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT) each reported blockbuster results, providing compelling evidence that the AI revolution is on track.
The results speak for themselves
Nvidia is scheduled to report the results of its fiscal 2026 second quarter (ended July 27) after the market close on Aug. 27. In the meantime, shareholders are looking for signs that the adoption of AI continues unfettered. Microsoft and Meta just provided exactly what investors were looking for.
As the world's largest software company and second largest cloud infrastructure provider, Microsoft holds a unique place in the tech landscape. Furthermore, the company was quick to recognize the AI opportunity and pivoted to position itself accordingly. As a result, Microsoft has been reaping the rewards by providing a growing number of AI solutions to its vast customer base.
During its fiscal 2025 fourth quarter (ended June 30), Microsoft generated revenue of $76.4 billion, rising 18% year over year. At the same time, its diluted earnings per share (EPS) of $3.65 climbed 24%. For context, analysts' consensus estimates were calling for revenue of $73.9 billion and EPS of $3.37, so Microsoft cleared both hurdles with ease. The results were fueled by Azure Cloud, as its growth rate accelerated to 39%, well ahead of the 34% expected by Wall Street.
CEO Satya Nadella left no doubt about what was driving the results. "Cloud and AI is the driving force of business transformation across every industry and sector," he said. He went on to note that Azure Cloud surpassed $75 billion in revenue, fueled by strong demand for AI.
Meta Platforms was also quick to recognize the opportunity afforded by AI, tapping into its wellspring of data to create its homegrown Llama AI models. The company has been spending heavily to capitalize on the AI windfall.
In the second quarter, Meta delivered revenue of $47.5 billion, up 22% year over year, resulting in EPS of $7.14, a 38% increase. The consensus on Wall Street was revenue of $44.83 billion and EPS of $5.89, so Meta sailed past expectations with plenty of room to spare.
In prepared remarks, CEO Mark Zuckerberg said, "The strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ads system," noting these systems drove "roughly 5% more ad conversions on Instagram and 3% on Facebook." It also wasn't surprising that AI is helping its social media platforms stay relevant. "AI is significantly improving our ability to show people content that they're going to find interesting and useful," Zuckerberg said.
Nvidia's future looks bright
It has been abundantly clear that Nvidia's meteoric rise is the direct result of the accelerating adoption of AI. Once known primarily for its gaming expertise, Nvidia's graphics processing units are now the gold standard for processing AI -- which is evident in its recent results.
In Nvidia's fiscal 2026 first quarter, revenue of $44 billion surged 69% year over year, but that only tells part of the story. The company's data center segment, which includes AI chips, soared 69% to a record $39 billion, now accounting for 89% of Nvidia's considerable revenue. That helps explain why investors are so keen to understand whether AI has room to run.
The future looks bright, as Nvidia is guiding for second-quarter revenue of $45 billion, or year-over-year growth of 50%.
One of the biggest factors weighing on Nvidia in recent months is the Trump Administration's moratorium on H20 AI chip sales to China. CEO Jensen Huang recently announced that the company had filed an application that would permit Nvidia to resume selling those chips in China, and was assured that those licenses would be granted. The company took a $4.5 billion charge related to its H20 chips in the first quarter, but analysts estimate Nvidia could now generate additional sales of $15 billion in the back half of 2025.
Furthermore, while Nvidia keeps its customer list under lock and key, analysts with Bloomberg and Barclays Research have read the tea leaves and concluded that Nvidia's four biggest customers -- responsible for nearly 53% of its revenue -- are:
Microsoft: 15%
Meta Platforms: 14%
Alphabet: 12%
Amazon: 11%
The robust results generated by Microsoft and Meta Platforms offer clear and compelling evidence that the adoption of AI continues unfettered, and as two of Nvidia's biggest customers, that bodes well for the company's ongoing success.
Finally, at just 31 times next year's expected earnings, Nvidia stock is reasonably priced.
That's why I predict Nvidia stock will probably soar for the rest of 2025.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,098,838!*
Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 29, 2025
Danny Vena has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Barclays Plc and 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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
National Post
34 minutes ago
- National Post
The two ways Trump's tariffs on Canada could collapse — despite his fight to keep them
WASHINGTON, D.C. — Time's up. On Friday, U.S. President Donald Trump raised the tariff rate on Canadian goods not covered under the Canada-United States-Mexico Agreement (CUSMA) from 25 to 35 per cent, saying they 'have to pay a fair rate.' The White House claims it's because of Canada's failure to curb the 'ongoing flood of fentanyl and other illicit drugs.' U.S. Customs and Border Protection (CBP) data, however, show that fentanyl seizures from Canada make up less than 0.1 per cent of total U.S. seizures of the drug; most smuggling comes across the Mexican border. Article content Article content But the future of Trump's policy also rests on shaky ground, and the tariffs could come crashing down even if Canada can't reach a deal at some point. Imposed through a controversially declared 'national emergency' under the International Emergency Economic Powers Act (IEEPA), the tariffs come with essentially three paths for relief to Canadian exporters and their American customers: the courts and the economy. Article content Article content There is a big question hanging over whether Trump's tariffs are even legal under the U.S. Constitution, which gives Congress powers over trade. Trump has bypassed that by claiming he's using presidential IEEPA emergency powers. Article content On Thursday, the Washington, D.C.-based Federal Circuit Court of Appeals convened an en banc hearing for oral arguments in challenges to Trump's use of IEEPA. The 11 judges questioned whether the law meant for sanctioning adversaries or freezing assets during emergencies grants Trump the power to impose tariffs, with one judge noting, 'IEEPA doesn't even mention the word 'tariffs.'' The White House, meanwhile, says the law grants the president 'broad and flexible' emergency powers, including the ability to regulate imports. Article content 'Based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing,' Thomas Berry, the CATO Institute's director of the Robert A. Levy Center for Constitutional Studies said in a statement. 'Several judges peppered the government's attorney with skeptical questions about why a broad term in IEEPA like 'regulate importation' should be read to allow the president to unilaterally impose tariffs.' Article content Article content Trump's lawyers claim his executive order provides the justifications for the tariffs — in Canada's case, fentanyl. But Berry said 'those justifications would not matter if IEEPA simply does not authorize tariffs in the first place. That is the cleanest and simplest way to resolve this case, and it appears that the Federal Circuit may be leaning toward that result.' Article content A decision is expected this month, and if it's a resounding pushback from the judges' panel, said Andrew Hale, a senior policy analyst at Heritage Foundation, the Supreme Court may not even take up the case. If so, he says, 'these Liberation Day tariffs and everything that's been imposed under emergency legislation, IEEPA, that all evaporates.'
Globe and Mail
38 minutes ago
- Globe and Mail
1 Green Flag for Dutch Bros Stock Right Now
Key Points Dutch Bros is cleverly centering its marketing strategy around winning over the Gen Z generation, and it's working. Starbucks is experiencing declining same-store sales, while Dutch Bros is growing. 10 stocks we like better than Dutch Bros › After disappointing performance following its initial public offering in 2021, Dutch Bros (NYSE: BROS) rewarded investors' patience with the stock rocketing higher. At the time of writing, the stock has climbed nearly 90% since 2023. However, there's one green flag that says Dutch Bros is on its way to delivering monster returns for long-term investors. Gen Z loves Dutch Bros Dutch Bros registration filing at the time of its IPO disclosed that only 23% of its customers were over the age of 36 and 67% were female. Brands that connect with Gen Z are in a great position to drive long-term growth, and Dutch Bros has tailored its strategy to win their loyalty. It offers competitive pricing for its "handcrafted" beverages, which includes colorful names like Cotton Candy and Bubblegum Rebel, which appeal to a younger crowd. Its momentum with this young demographic could explain why Starbucks is having trouble growing sales. In the first quarter, posted systemwide same-store sales for Dutch Bros increased by 4.7% year over year, marking the ninth consecutive quarter of positive comp sales growth. Starbucks has delivered six consecutive quarters of declining comp sales, with North America comps down 2% year over year in the most recent quarter. This represents an impressive market share gain for Dutch Bros, which doesn't have nearly the geographic diversity that Starbucks has. Dutch Bros has just over 1,000 shops open in 18 states but plans to have more than 2,000 by 2029. Is the stock a buy right now? It's another good sign for Dutch Bros that McDonald's venture into the specialty beverage market with CosMc's failed. Dutch Bros has tremendous brand power, excellent management, and brilliant marketing. The stock is still worth buying. It was undervalued over a year ago, trading at a low price-to-sales multiple, which led to the rerating by investors. It is now trading at a more appropriate sales multiple for its growth potential. As it continues to grow, margins will likely expand and earnings per share will likely take off. This looks like a great long-term investment. Should you invest $1,000 in Dutch Bros right now? Before you buy stock in Dutch Bros, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dutch Bros wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
Globe and Mail
an hour ago
- Globe and Mail
This Underrated Quantum AI Stock Could Deliver Huge Gains by 2030
Key Points Arqit Quantum is a promising developer of technology that protects against cyberattacks from quantum computers. Although quantum computers don't present a cybersecurity threat yet, it could be only a matter of time. Arqit could have a huge addressable market if this quantum computing threat materializes in the next few years. 10 stocks we like better than Arqit Quantum › Every now and then, a new technology meets its moment. That's arguably happening with quantum computing. Over the last three months, several quantum computing stocks have skyrocketed. IonQ 's share price is up more than 40%. Rigetti Computing has soared more than 60%. The aptly named Quantum Computing has seen its share price more than double. And D-Wave Quantum is the biggest winner, with its stock skyrocketing more than 140%. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Another largely underrated quantum computing stock has also taken off in recent months. And it could deliver huge gains by 2030 with a little luck. A promising "anti-quantum computing" stock The stock I'm referring to is Arqit Quantum (NASDAQ: ARQQ). You might say that Arqit is more of an "anti-quantum computing" stock than it is a quantum computing stock. Arqit has developed technology that can protect any networked device or data against cyberattacks from quantum computers. Its flagship product, Arqit SKA-Platform, uses symmetric key agreement (SKA). This cryptographic approach allows two or more parties to share a secret key used for encryption and decryption without sending the key over an unsecured channel. SKA-Platform depends on a proprietary version of a process called replicated entropy, where identical sets of random numbers are delivered securely to data centers. The product also features a lightweight software agent that can be downloaded onto any device. It supposedly would take even the fastest quantum computer millions of years to break the symmetric encryption keys created by SKA-Platform. Arqit and its technology have already garnered a lot of praise. The company was recognized for its innovation in 2023 at the Institution of Engineering and Technology awards. It has also been named the Cyber Security Awards' Cyber Security Software Company of the Year and won the Innovation in Cyber Award at the National Cyber Awards in the United Kingdom. "Q day is coming" Quantum computers don't present a cybersecurity threat -- yet. However, to use Arqit's words, "Q day is coming." It's only a matter of time before a large-scale quantum computer is developed that puts the entire public key infrastructure (PKI) encryption framework in jeopardy. Over the last 12 months, several quantum computing leaders have achieved major milestones. The more progress they make, the greater the interest is likely to be for Arqit's technology. That interest is already picking up. The company has inked contracts with a major telecommunications network operator and the U.S. Department of Defense. It expects to land more deals in the coming months. Arqit thinks that its SKA-Platform could be used on every cloud and networked device in the world. The company also believes that its product is the only one that can create encryption keys to protect against quantum computer cyberattacks using a cloud platform at a large scale and low cost. As you might imagine, this creates a massive opportunity for Arqit if it's right. Gartner estimates that the global cybersecurity market will reach $294 billion by 2028. If current encryption methods are rendered obsolete by quantum computers, Arqit should be able to target virtually all of this market. High risk, potentially high reward That's an exciting total addressable market for a company with a market cap hovering around $450 million. But while Arqit Quantum offers potential high rewards for investors, it also comes with high risk. The company's future hinges on the development of quantum computers that present a huge cybersecurity threat. Arqit has no control over whether this will happen and, if it does, when it will happen. In the meantime, expenses are increasing while revenue is meager (only $67,000 in the first half of fiscal year 2025). Arqit is on track to burn through its cash position of $24.8 million as of March 31, 2025, by early next year. The company can tap its at-the-market equity offering program to raise up to $75 million. However, that means issuing new shares -- and diluting the value of existing shares. Still, it's quite possible that Q day will arrive within the next few years. If it does, Arqit's stock could skyrocket. And this anti-quantum computing stock could truly meet its moment. Should you invest $1,000 in Arqit Quantum right now? Before you buy stock in Arqit Quantum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arqit Quantum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
