The Zacks Analyst Blog Highlights NVIDIA, Meta Platforms and Microsoft

For Immediate ReleaseChicago, IL – May 5, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corp. NVDA, Meta Platforms, Inc. META and Microsoft Corp. MSFT.Here are highlights from Friday’s Analyst Blog:Should You Hold NVIDIA as Meta & Microsoft Double-Down on AI?NVIDIA Corp.stock gained nearly 2.5% on Thursday, buoyed by a renewed wave of optimism from two of its largest customers, Meta Platforms, Inc. and Microsoft Corp.. Both tech giants reaffirmed, and in Meta Platforms' case, raised their capital expenditure commitments toward AI infrastructure.This resurgence of AI-related investment could mark a key turning point for NVIDIA stock, which has pulled back 27% from its 52-week high of $153.13 attained on Jan. 7, 2025. With the renewed optimism about AI investment, the question arises: Should investors rush to buy more, or is holding the stock the smarter move right now?AI Spending Spree Could Reignite Demand for NVIDIA's ChipsMicrosoft, a major cloud provider and longtime NVIDIA partner, confirmed during its third-quarter fiscal 2025 earnings call that it will maintain its massive $80 billion capital expenditure plan for AI data centers, with more than half of that directed toward U.S. operations.Meanwhile, during its first-quarter 2025 earnings call, Meta Platforms increased its 2025 capital spending outlook to a range of $64-$72 billion, up from the prior $60-$65 billion range. The added spending will primarily go toward expanding data center capacity and AI infrastructure, both heavily reliant on NVIDIA's high-performance graphics processing units (GPUs).Meta Platforms' CFO, Susan Li, made it clear that the CapEx bump is driven by AI ambitions and infrastructure upgrades. Similarly, Microsoft CFO Amy Hood indicated that fiscal 2026 investments will grow, albeit at a slower pace, and be more closely aligned with short-term revenue gains, implying accelerated AI workload deployments.These commitments are strong signals that NVIDIA's chips, especially its H100 and upcoming B100 GPUs, will remain in high demand as hyperscalers scale their AI platforms.AI Boom Driving NVIDIA's Financial PerformanceNVIDIA's products are at the center of the ongoing AI revolution, driving demand from hyperscalers, enterprises and cutting-edge startups alike. The data center end-market continues to be a powerhouse for NVIDIA. In the fourth quarter of fiscal 2025, revenues from the data center end-market grew 93% year over year to $35.58 billion and contributed 90.5% to the total sales.AI-driven workloads, cloud computing expansion and increasing enterprise adoption of AI models have turned NVIDIA's high-performance chips into a necessity rather than a luxury. With businesses aggressively investing in AI infrastructure, NVIDIA remains positioned at the heart of this technological transformation.Financially, NVIDIA is firing on all cylinders. In the fourth quarter of fiscal 2025, revenues surged 78% year over year, while non-GAAP EPS climbed 71%. The company's first-quarter fiscal 2026 guidance of $43 billion in revenues represents a staggering increase from $26.04 billion in the prior-year quarter.Analysts expect NVIDIA to maintain this momentum, forecasting fiscal 2026 and 2027 revenue growth of 48% and 24%, respectively. With earnings projected to rise 42% in fiscal 2026 and 27% in fiscal 2027, NVIDIA's long-term investment case remains intact. The stock surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 7.9%.NVIDIA Overvaluation Warrants a CautionValuation-wise, NVIDIA is overvalued, as suggested by the Zacks Value Score of D.However, in terms of forward 12-month Price/Sales, NVDA shares are trading at 13.32X, higher than the Zacks Semiconductor – General industry's 10.96X.Conclusion: Hold NVDA Stock for NowNVIDIA's stock may be off its highs, but the AI megatrend is very much alive and is receiving fresh fuel from the likes of Meta Platforms and Microsoft. Their deep-pocketed commitments to AI infrastructure spending underscore NVIDIA's strategic importance in the evolving tech landscape. However, its high valuation makes it vulnerable to short-term volatility. For now, holding the stock is the smartest approach.Currently, NVIDIA carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                 Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. 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