Jensen Huang launches accelerated computing company Nvidia (NVDA -0.02%) He joined the company in 1993 and has served as CEO and president ever since. Nvidia has made many advances under his leadership, but the invention of the graphics processing unit (GPU) in 1999 was particularly significant.
Nvidia GPUs have long been the gold standard for rendering graphics for 3D design and gaming applications. These days, it has become the chip of choice for complex data center workloads such as training large language models and running generative artificial intelligence applications.
Jensen Huang gave the keynote speech last week at the annual conference CES 2025 in Las Vegas. CES focuses on innovation in technology, and Huang’s talk made it clear that Nvidia’s product pipeline is still full of potential.
Generative AI is just the first step in a technological revolution
Wall Street’s interest in generative artificial intelligence can be traced back to the launch of ChatGPT in late 2022. This conversational application took off almost immediately, starting a chain of events that led to a significant increase in demand for Nvidia GPUs. The company has reported triple-digit profit growth over the past six quarters, and its stock has increased 840% over the past two years.
Some investors worry that generative AI will become a short-term catalyst or a bubble, but this couldn’t be further from the truth. Since its inception, the Internet has become increasingly essential, and artificial intelligence is no exception. In other words, the generative AI boom is just the first stage in an endless technological revolution. And Nvidia is at the center of that revolution.
Physical AI is the next step in the technological revolution
CES’ Jensen Huang said, “The next frontier of AI is physical AI.” While generative AI can understand and generate media, physical AI can understand, navigate, and interact with the physical world. Huang said it will eventually power many different types of autonomous robots, but the first intelligent robots many people will use will be self-driving cars.
Importantly, Nvidia has products for all three layers of the self-driving car computing stack. The company’s GPUs provide the supercomputing infrastructure needed to train AI models. The company’s Drive platform provides the software development tools needed to build self-driving applications. Additionally, the company’s AGX system provides onboard computing power that allows cars to navigate the physical world.
In a recent interview with Yahoo Finance, Jensen Huang said the revenue run rate for Nvidia’s self-driving products could reach $5 billion this year, up from $1.8 billion last quarter. Importantly, automotive and robotics are currently the company’s smallest segments, but this could change soon. Citigroup predicts that the number of self-driving cars will increase nearly five times by 2030 and 14 times by 2035.
Image source: Getty Images.
Nvidia is ideally positioned to be a leader in AI robotics
“The ChatGPT moment for robotics is coming,” CES’ Jensen Huang told the audience. Next, we introduced Cosmos, a suite of pre-trained robot models that developers can fine-tune. Huang also explained that Nvidia has products for all three layers of the robotic computing stack.
First, Nvidia GPUs provided the supercomputing infrastructure needed to train the robotics models. Second, the Isaac platform includes code libraries and pre-trained models that help engineers develop robotics applications across three use cases: industrial manipulation arms, autonomous mobile robots, and autonomous humanoid robots. Masu. Isaac also serves as a simulation engine that supports synthetic data generation and robotics model evaluation.
Finally, Jetson embedded systems integrate GPU, CPU, and memory on a single chip, giving robots the computing power they need to interact with the real world. As the AI boom evolves into a robot revolution, NVIDIA has a clear advantage, and humanoid robots could represent a huge opportunity for the company. Citigroup expects spending to exceed $200 billion by 2035 and $1 trillion by 2040.
NVIDIA stock is cheaper today than it was two years ago
Many investors consider NVIDIA to be a very expensive stock as it has returned 840% over the past two years. However, the stock trades at 55 times earnings, a fair valuation considering Wall Street expects earnings to grow 38% annually over the next three years. These numbers give us a price-to-earnings (PEG) ratio of 1.4.
By comparison, the company’s stock was trading at a multiple of 63 times two years ago, and at the time Wall Street expected earnings to grow 22% a year. These numbers indicate a significantly higher PEG ratio of 2.9.
That means Nvidia stock is now much cheaper than it was before the generative AI boom began. And given the tailwinds from autonomous driving and robotics that Jensen Huang highlighted at CES, the stock remains a worthy long-term investment.
Citigroup is an advertising partner of Motley Fool Money. Trevor Jennewine has a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
