The Nasdaq-100 measures the performance of the 100 largest companies on the Nasdaq Stock Exchange. The index is commonly viewed as a barometer for growth stocks. It soared 38% over the past year, led higher by Nvidia (NVDA -1.99%) and CrowdStrike (CRWD 2.03%). But Wall Street analysts are still predicting gains for shareholders of both stocks.

  • Nvidia stock soared 219% during the past year, but the median price target of $1,000 per share implies 13% upside from its current price of $885 per share. Moreover, while 59 analysts cover the company, not a single one currently recommends selling.
  • CrowdStrike stock soared 164% during the past year, but the median price target of $400 per share implies 28% upside from its current price of $310 per share. Moreover, while 49 analysts cover the company, not a single one currently recommends selling.

Here's what investors should know about Nvidia and CrowdStrike.

Nvidia: 219% return over the past year

Nvidia reported spectacular financial results in the fourth quarter, crushing estimates on the top and bottom lines. Revenue soared 265% to $22.1 billion, gross margin expanded 10 percentage points, and non-GAAP net income surged 486% to $5.16 per diluted share. That momentum was primarily driven by strong sales growth in the data center segment, which itself was driven by explosive interest in artificial intelligence (AI), especially generative AI.

Going forward, Grand View Research forecasts that AI spending across hardware, software, and services will grow at 36% annually through 2030, and Bloomberg forecasts that generative AI spending across the same categories will compound at 34% annually through 2032.Nvidia is well positioned to benefit in all cases. Its graphics processing units (GPUs) power "all of the most advanced AI systems, giving the company a market share estimated at more than 80%," according to The Wall Street Journal.

Moreover, Nvidia participates in other parts of the AI economy. It has successfully diversified its data center hardware portfolio with high-speed networking equipment and central processing units (CPUs) purpose-built for AI. Nvidia has also branched into subscription software and cloud services. For instance, DGX Cloud lets businesses provision the supercomputing infrastructure, software, and services needed to build and manage AI applications across a range of use cases, from recommender systems to autonomous robots.

Also noteworthy, Nvidia recently introduced new products and systems at its annual GPU Technology Conference (GTC). The headline releases were platforms featuring its latest GPU architecture, Blackwell. The company called Blackwell the "world's most powerful chip" in a press release. Additionally, CEO Jensen Huang said, "Generative AI is the defining technology of our time. Blackwell is the engine to power this industrial revolution."

Nvidia currently values its addressable market at $1 trillion, and Wall Street expects the company to grow earnings per share at 35% annually over the next three to five years. That estimate makes its current valuation of 74 times earnings look somewhat pricey, though not as expensive as investors might assume given that shares more than tripled in the past year. Even so, the numbers I just provided imply a PEG ratio of 2.1, but I would personally feel more comfortable buying the stock at a PEG ratio below 2.

CrowdStrike: 164% return over the past year

Cybersecurity software vendor CrowdStrike looked strong in the fourth quarter. Revenue increased 33% to $845 million and non-GAAP net income more than doubled to $236 million. Management expects that momentum to continue in the coming quarters. In fact, CrowdStrike is one of only three publicly traded enterprise software companies projecting 30% revenue growth this year, according to Morgan Stanley.

CrowdStrike is the market leader in endpoint security software, and recent data from the International Data Corp. (IDC) suggests the company is also gaining share more quickly than its competition. CrowdStrike's success in endpoint security stems from what management believes is the most effective artificial intelligence and most easily deployed cybersecurity software on the market, and it bodes well for shareholders for two reasons.

First, endpoint security is one of the fastest-growing product categories in the cybersecurity software market, meaning CrowdStrike has a powerful tailwind at its back. Second, the brand authority the company has cultivated in endpoint security is driving share gains in other product categories, including identity protection, cloud security, and security information and event management (SIEM).

Additionally, during the most recent earnings call, management mentioned early momentum with new data protection and IT automation software modules, and excitement surrounding its new generative AI assistant Charlotte AI. Those products expand CrowdStrike's addressable market, and further solidify its position as a vendor consolidator. To elaborate, many enterprise deploy north of 60 cybersecurity point products, but CrowdStrike reduces complexity by letting enterprises eliminate point products and consolidate on a single platform.

Going forward, Wall Street analysts expect CrowdStrike to grow revenue at 29% annually over the next five years. In that context, its current valuation of 24.7 times sales seems reasonable. Investors should consider buying a small position in this growth stock here.