Nvidia (NVDA) ended 2024 as the biggest gainer of the year. It jumped more than 174% and had outperformed the market seemingly across the board. Despite the ongoing sell-off that hindered its price movement, 2025 looks to still be a banner year for the tech firm. CEO Jensen Huang has fueled bullish sentiment around NVDA, especially following his latest tour in Europe, where he brought up “Sovereign AI.” But what exactly is this concept?
European leaders enthusiastically embraced Huang’s vision of “sovereign AI,” where each country must build its own AI infrastructure. Sovereign AI represents a total addressable market of $1.5 trillion, according to Oppenheimer analyst Rick Schafer. The analyst also estimates Europe’s proportion of that market is around $120 billion. Schafer projects that multi-gigawatt data centers are expected by 2028, with just a single gigawatt data center translating to a revenue opportunity of up to $50 billion for Nvidia. If Europe does indeed work on building its own AI with the assistance of Nvidia, that could further push Nvidia as the dominant force in AI.
“At the forefront of the AI industry, Nvidia remains best positioned in AI, benefiting from full-stack hardware/software solutions and unique rack-scale,” Schafer wrote in a research note on Monday, reiterating his Outperform rating and $175 target price on the stock. At press time, NVDA is up 3% to $145. The stock is trading near the top of its 52-week range and above its 200-day simple moving average.
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Furthermore, Nvidia’s massive $500 billion infrastructure plan with Foxconn represents the biggest shift in how AI server suppliers in the USA are operating right now, and the company is preparing to produce double-digit percentages of GPU modules and also boards domestically. The Taiwanese firm currently makes over 90% of these components in Taiwan, which makes this part of Nvidia’s $500B AI server growth initiative particularly significant.
Meanwhile, Nvidia’s growth is unprecedented. In Q1 of fiscal year 2025, Nvidia (NVDA) boasted revenue of $44.1 billion, up 69% year over year. Earnings per share also jumped 33%, with Q2 revenue trending near the $45 billion mark, showcasing 50% growth. That should allow Nvidia to break through the $150 mark from its current $144 price. It has a $175 median target, representing 23% upside for the stock, with its bullish projection sitting at $235. Altogether, by the end of 2025, NVDA could jump more than 60% from where it traded to start June.