1 Artificial Intelligence (AI) Stock That Could Go Parabolic

Ryan Vanzo, The Motley Fool

Thu, May 1, 2025, 10:00 AM 5 min read

• Nvidia's stock is down 20% this year.

• But the company's biggest days of growth are still ahead.

It's been a difficult year so far for Nvidia (NASDAQ: NVDA). Shares were down by more than 30% at one point, wiping more than $1 trillion off the company's valuation.

After a brief rebound, shares are now down by just 20% year to date. The stock isn't as cheap as it was a few weeks ago, but this is still an incredible chance for patient investors to lock in a great price for a business that should grow exponentially in the years to come. There's one reason in particular that should get investors very excited.

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Nvidia is one of the most valuable companies in the world for a reason. Its graphic processing units (GPUs) are some of the best in the world.

For AI applications in particular, its GPUs are considered the best in the world. They are crucial components that make the AI revolution possible, allowing companies to train and execute large models that require huge data sets to run properly.

Its next-gen Blackwell chips have performance benchmarks that few companies can match. But it's not just about raw performance. The hardware is supported by a software suite called Compute Unified Device Architecture (CUDA).

CUDA allows developers to customize Nvidia's GPUs to their specific uses, unlocking performance upgrades that make the company's GPUs even more attractive. And once a customer is using CUDA, it essentially locks it into Nvidia's hardware and software, giving the chipmaker control over both ends of the value chain.

In summary, Nvidia has some of the best chips on the market, especially for AI applications, and its CUDA suite creates a durable competitive advantage when it comes to customer stickiness by embedding itself directly into its customers' products from both a hardware and a software perspective. That's an incredibly valuable position considering the AI industry as a whole is expected to surpass $4 trillion by 2033, up from just $189 billion in 2023.

The company's future is bright on many levels. And some recent comments from Morgan Stanley analyst Joseph Moore should get investors even more excited about its long-term prospects.

The recent pullback in Nvidia's stock price stemmed from many causes. The market overall took a dive earlier this year, dragging many of the biggest names down with it.