nvidia (NVDA) 3.97%)) Last week we announced an overwhelmingly positive fourth quarter results. However, the shares sank the next day. Should investors be worried? i don’t think so.
Certainly, Nvidia’s growth has been slower. However, the company’s future remains bright. CEO Jensen Huang revealed the three growth drivers for Nvidia.
1. Agent AI
“This is now the beginning of our age of agent AI, and hearing a lot of people talk about it, we (‘Ve) are doing something really great,” Huang said in Nvidia’s fourth quarter revenue call. In my opinion, he was right for all three counts.
Agent AI includes autonomous AI agents that can always make decisions and perform tasks without human involvement. 2025 is becoming the year of AI agents. Several major technology companies have invested heavily in Agent AI, including Google Parent Alphabet, Meta Platforms, Microsoft and Openai.
Nvidia is already in a state of deep development of agent AI. CFO Colette Kress pointed out in the fourth quarter call that the company’s consumer internet revenues have tripled by about three times the year, with Agent AI as one of the growth drivers. Huang suggests the leading agent AI AI Advances, saying Nvidia “has some really exciting things to share.”
2. Physical AI
There’s a lot of talk around Agent AI, but I probably haven’t heard much about physical AI. However, Huang considers it to be another important part of the next wave of AI. In his words, it is “close nearby.”
Physical AI involves the use of AI technology within a physical system. One good example of physical AI is in robots. The other is a self-driving car. Huang mentioned several other applications of physical AI in Nvidia’s Q4 calls, including tractors, lawnmowers, buildings, warehouses, and more.
Nvidia is already a major player in the physical AI market. Kress noted that almost all self-driving vehicle (AV) companies “use NVIDIA’s infrastructure and software platforms in data centers, cars, or both. She also highlighted Nvidia’s recently announced Cosmos World Foundation Model Platform, which allows developers to build physical AI systems. Kress mentioned Uber Technologies as one of the early adopters of COSMOS.
Huang also pointed out that many startups are working on physical AI. He said, “Each of them needs a significant amount of computing infrastructure.” Of course, this is a great opportunity for Nvidia as a leader in the GPU market.
3. Sovereign AI
The third component of the next wave predicted by Huang is sovereign AI. What is Sovereign AI? This refers to a nation that builds AI systems that can be controlled using its own data and technology infrastructure.
Huang didn’t talk much about Sovereign AI on Nvidia’s Q4 call. However, he said technologies like Agent AI and physical AI “are barely left the ground.” However, he argued that Nvidia is behind what’s going on with Sovereign AI because it is “at the heart of much of this development.”
Is it just hub arrogance for the CEO acting as a cheerleader for his company? no. Nvidia is truly at the forefront of many sovereign AI initiatives. For example, French cloud service provider Scaleway uses NVIDIA’s technology to build Europe’s most powerful cloud-based AI supercomputer. The TATA Group in India uses the NVIDIA GH200 Grace Hopper SuperChip to develop a sovereign AI infrastructure. Japan is working with NVIDIA to build a sovereign AI system, including public-private partnerships. And these are just a few of the sovereign AI initiatives that Nvidia is involved in.
Is Nvidia stock really a great choice thanks to these growth drivers?
Huang did not directly tell him to buy Nvidia stock hands with his fist, due to the company’s agent AI, physical AI, and sovereign AI opportunities. However, I consider all three growth drivers to be a major reason to buy stocks now.
We fully agree with Huang that we are still in the early stages of these areas of AI. I also think Nvidia is in the most powerful position of any company to benefit from all three components of AI Wave.
Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Keith Speights has positions in Alphabet, Meta Platforms and Microsoft. Motley Fools are located and recommend Alphabet, Meta Platforms, Microsoft, Nvidia, and Uber Technologies. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
