It’s been another great year for artificial intelligence (AI) stocks. You could throw a dart at a list of AI stocks hanging on a wall and be more likely than not to hit one that delivered huge gains in 2024.
However, many analysts think some of this year’s high-flying AI stocks could run out of steam in the next one. But the good times may keep rolling for some. These two AI stocks are almost doubled or more in 2024, and could go even higher in 2025, according to Wall Street.
Broadcom
Broadcom‘s (AVGO 1.13%) the share price has almost doubled year to date. In fact, the stock had more than doubled for the year until a few days ago, when the Fed’s reluctance to forecast as many rate cuts for 2025 as investors hoped led to a stock sale.
The interesting thing about Broadcom’s impressive performance is that its recent quarterly results were not spectacular if we exclude the impact of its acquisition of VMware. However, investors continue to be excited by its AI opportunities. Management is also excited. “[W]And we see our opportunity for the next three years in AI as massive,” said CEO Hock Tan on the company’s Q4 fiscal results call this month.
In particular, Broadcom should benefit as some large organizations develop their own custom AI accelerators. These efforts will involve millions of AI accelerator clusters, which will require a network. The management thinks that this will represent a market of $60 billion to $90 billion in its fiscal 2027, and believes that the company will be the first player in it.
Even after the huge gains in Broadcom’s stock price this year, Wall Street remains very optimistic about the stock. Of the 43 analysts surveyed by LSEG in December, 38 rated Broadcom as a buy or strong buy. The other five analysts gave it a hold rating.
However, most analysts do not expect the stock’s significant surge to continue. The 12-month average price for the stock is only 4% above its current level, although the most optimistic analyst polled by LSEG thinks Broadcom shares can jump another 35%.
Nvidia
Nvidia (NVDA 3.08%) is ready to consult consecutive years of spectacular earnings. The stock rose almost 239% higher in 2023. In 2024, it is still up more than 160% year to date, despite falling into correction territory in recent weeks.
Unlike Broadcom, Nvidia doesn’t need to put any asterisks next to its impressive financial results from recent quarters. The GPU maker’s revenue grew 94% year-over-year in the third quarter to $35.1 billion — a record high. Much of that success has been due to explosive growth in demand for its data center GPUs. And most of them what you do explosive growth has been due to AI.
Management doesn’t expect growth to slow down anytime soon. The demand for the new GPUs based on their Blackwell architecture is greater than the supply. CEO Jensen Huang described Blackwell’s request as “disgusting” in his comments on the Q3 earnings call.
Wall Street remains in love with Nvidia. A whopping 62 of the 64 analysts surveyed by LSEG in December who cover the stock rated it a buy or strong buy. The two outliers recommend keeping. The average 12-month price for Nvidia is almost 32% above its current share price.
Best AI stock for 2025?
I don’t always agree with Wall Street analysts (sometimes wise, sometimes not). However, in this case, I think they are correct in seeing Nvidia as the better AI stock for 2025 than Broadcom.
Nvidia’s launch of its Blackwell chips should drive revenue and earnings growth for the company over the next year. It will almost certainly unveil an even more powerful AI chip in the second half of 2025. I’ll be surprised if Nvidia shares don’t jump another 30% or more in the next 12 months, though I don’t expect the same . earnings levels that we saw in 2023 and 2024.