Prediction: Nvidia Stock Will Soar in the Second Half of 2025, Thanks to This Incredible News From Microsoft and Meta Platforms

Nvidia (NVDA -1.82%) 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 (META -1.99%) and Microsoft (MSFT -1.10%) 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.