AI Stock Up 89% in a Year: One Key Metric to Watch in 2025

In the rapidly evolving world of artificial intelligence (AI), one stock has caught investors' attention with its impressive performance over the past year. This AI stock has surged by 89% since January 2024, outpacing the broader market and demonstrating its potential in the AI sector. As we look ahead to 2025, investors should keep a close eye on one crucial metric to gauge the stock's continued success.



The metric in question is the company's revenue growth trajectory, which has been robust over the past year. In the third quarter of 2024, the company's revenue grew 18% year over year to $6.8 billion, while its diluted earnings per share (EPS) surged 161% to $0.47. This growth was driven by strong demand for the company's AI-centric data center chips, with data center revenue growing 122% year over year and 25% sequentially to $3.5 billion. However, the company's gaming segment revenue plunged 69% to $462 million, which was a drag on overall results.

Looking ahead to 2025, the company is well-positioned to continue its growth trajectory, particularly in the data center market. The company's CEO, Lisa Su, has stated that the company believes it gained server CPU share in the quarter as enterprise wins accelerated. Additionally, numerous big-name cloud and AI customers expanded their use of the company's MI300X AI-centric accelerators. As AI adoption continues to accelerate across industries, the company's focus on developing compelling alternatives to Nvidia's premium-priced processors could drive further growth in the data center market.

Moreover, the company's recent results and analyst expectations support the notion that the company's revenue growth trajectory will continue in 2025. Rosenblatt Securities analyst Hans Mosesmann recently named the company a "Top Stock for 2025," with a buy rating and $250 price target, representing potential upside of 105% compared to Wednesday's closing price. The analyst cited the opportunity in the data center GPU market, suggesting that the adoption of the company's chips could increase significantly.

In conclusion, the AI stock that has surged 89% over the past year is well-positioned to continue its growth trajectory in 2025, driven by strong demand for its AI-centric data center chips. Investors should keep a close eye on the company's revenue growth trajectory as a key metric to gauge its continued success in the AI sector. As AI adoption continues to accelerate across industries, the company's focus on developing compelling alternatives to Nvidia's premium-priced processors could drive further growth in the data center market, making it an attractive investment opportunity for 2025.