NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) is poised to remain at the forefront of the US semiconductor industry in 2025, leading the first half’s growth on the back of robust AI and cloud investments, according to Bank of America.

With its Blackwell GPUs driving innovation in AI and cloud computing, Nvidia is expected to capitalize on ongoing demand from US cloud service providers and enterprise AI deployments. Analysts have Nvidia as a top pick for 2025, alongside Broadcom (AVGO) and Marvell Technology (MRVL), as the industry continues its upcycle, which began in late 2023.

AI momentum to propel first-half growth

The first half of 2025 is forecasted to be dominated by advancements in AI technologies, with Nvidia leading the charge. The company’s Blackwell GPUs are central to the ongoing “arms race” among cloud providers, as enterprises expand AI use cases into larger training models, inference technologies, and sovereign deployments.

Nvidia’s leadership in the AI space, coupled with its ability to innovate rapidly, positions it as a primary beneficiary of the sector’s projected 15% growth to $725 billion in 2025, according to Bank of America’s estimates. AI-driven semiconductor sales are expected to outpace other segments, ensuring Nvidia remains a key player throughout the upcycle.

Second half challenges

Despite its strong outlook, Nvidia faces potential challenges in the latter half of 2025 as investor attention may shift to automotive and industrial chipmakers like ON Semiconductor (ON), assuming a global economic recovery. Bank of America also warns of tougher year-over-year comparisons in the AI market, following two years of triple-digit growth in AI silicon.

Uncertainties surrounding Blackwell GPU deliveries, geopolitical risks from China restrictions, and broader macroeconomic factors could temper Nvidia’s momentum. However, its strong positioning in AI and cloud computing provides a strong foundation for sustained growth.

The semiconductor landscape

Bank of America forecasts the semiconductor industry to grow by 15% in 2025, supported by AI and cloud investments in the first half and a cyclical recovery in automotive and industrial markets in the second half.

In the wafer fabrication equipment (WFE) sector, Nvidia’s ecosystem partners, such as Lam Research (LRCX), are also set to benefit from a recovery in capital expenditures and easing restrictions in China. The industry’s upcycle, typically lasting two-and-a-half years, remains on track, with 2025 marking the midpoint of this growth phase.

Opportunities (and risks) ahead

While the semiconductor sector offers significant opportunities, including potential M&A activity and structural transformations, challenges remain. Investor sentiment may shift away from crowded AI stocks toward software and China-resilient plays, reflecting broader market dynamics.

For Nvidia, analysts suggest the key to maintaining its leadership will be its ability to navigate these challenges while continuing to deliver cutting-edge AI solutions and capitalize on expanding market demand.