The data centers market has fueled NVIDIA’s growth.
However, the company has another huge opportunity with cars.
At its current evaluation, this opportunity does not seem at the cost of the stock.
It is clear that Nvidia (Nasdaq: NVDA) was the largest winner of Artificial Intelligence (AI) Infrastructure boom. It is Graphic processing units (GPU) have become the essential fleas to carry out workloads AI in data centers, thanks to their parallel processing capacities. The parallel treatment allows fleas to carry out many calculations at the same time, which is essential both for the formation of large languages models (LLM) and the execution of IA inference.
Just as important is the Cuda de Nvidia software platform, which allows developers to build and optimize AI models on its equipment. The best-class GPU performance combination in class as well as a sticky software platform contributed to cement the example of the company in the space of the data center.
At the same time, it was an explosive market. In the past two years, its income from the data center has increased from $ 4.3 billion in the first quarter budget of 2024 (completed on April 30, 2023) to $ 39.1 billion in tax function of 2026 (completed on April 27, 2025). This represents an increase of almost 10 times in just two years.
NVIDIA sees capital expenditure of the data center (CAPEX) go to more than $ 1 Billion by 2028. Not all expenses be to GPUs, but with its market share of more than 80% in the GPU area, NVIDIA is well positioned to capture a significant part of this overall growth in the data center.
However, it is not the only enormous potential market that Nvidia is considering.
Although the expenses of the AI data center are by far the largest Nvidia market, it is certainly not the only final market in which it participates. The GPU was originally created to accelerate the graphic rendering in video games. The company then created Cuda as a means of developing beyond this market, which gives developers an easy way to program its GPUs for other tasks.
However, the GPU market outside video games was slow to develop. Around the same time, Cuda was introduced, Advanced micro-apparents Bought GPU Ati rival technologies. With integration an top priority and not much early traction outside of video games for GPUs, AMD was not in a hurry to create a competing software platform. Despite the slow adoption, Nvidia has intelligently started to push Cuda to use in universities and research laboratories, which has helped make it the default software that the developers have learned to program GPUs. Today, which is why the NVIDIA GPUs have a dominant place in the data center.
At the same time, however, Nvidia was also moving into another market: cars. In fact, Audi was one of its first large customers outside the video game space. The German car manufacturer has started using NVIDIA GPUs in its infotainment and navigation systems, and NVIDIA later built a full automotive platform called Drive, which is a family of hardware and software tools that developers need advanced driver and autonomous vehicles.
Although promised for a long time, autonomous driving is finally there. Alphabet Waymo, for example, now provides more than 250,000 Robotaxi rides per week in the United States, it is currently only in a few cities, but it develops quickly. According to reports, Waymo uses NVIDIA GPUs in its vehicles.
Waymo is not the only NVIDIA automotive customer – far from it. Mercedes,, Volvo, And Hyundai All use the NVIDIA training platform and GPUs to supply autonomous technologies, while Toyota Announced that it would use the NVIDIA platform and chips for advanced driver assistance features in its new generation vehicles. In the meantime, General Motors And Hyundai will use Nvidia Technologies to improve their manufacture with “Smart Factory” initiatives.
In the last quarter, NVIDIA saw its automobile income increased by $ 567 million by $ 567 million. However, more growth is in store, the company providing that its automotive income is reaching around 5 billion dollars this exercise. Growth will take place when new vehicles using its technology are starting to take the roads. The new CLA sedan of Mercedes is the latest vehicle with its technology.
It is easy to reject a segment which was only a fraction of its income from the data center in the last quarter, but with the data center, NVIDIA showed how fast the final markets can increase. The autonomous driving market is still in its infancy, so the opportunity is simply massive. With Waymo having around 1,500 Robotaxis now, it is easy to see that it could drop to 100 times or more vehicles when it reaches the ladder.
Meanwhile, the CEO of Nvidia, Jensen Huang, predicted that each car on the road will eventually be robotic. With more than a billion cars on the road, this is a huge opportunity. During his investor day in 2022, Nvidia estimated that the automotive market could be an opportunity of $ 300 billion.
With NVIDIA’s trading of shares to a price / benefit ratio (P / E) ultimately 33 times the estimates of this year analyst and a price / price ratio for growth (PEG), with a number of less than 1 considered as undervalued, action is currently not an increase in potential compared to its next potential market opportunity.
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Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Geoffrey Seiler has alphabet positions. The Motley Fool has positions and recommends micro advanced devices, alphabet and Nvidia. The Motley Fool recommends General Motors. The Word’s madman has a Disclosure policy.
Nvidia Stock: Forget AI data centers, is this the next big growth engine in Nvidia? was initially published by the Motley Fool
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