Jensen Huang founded Nvidia in 1993 and has served as CEO and president since then. Last week, he delivered a keynote speech at CES 2025, highlighting the company’s significant position in the advancing technological landscape.
Nvidia’s future rooted in AI advancements
Nvidia, renowned for developing the graphics processing unit (GPU) in 1999, has established itself as the standard for rendering graphics in 3D design and gaming applications. More recently, its GPUs have become the preferred choice for complex data center workloads, particularly for training large language models and running generative artificial intelligence applications. The surge in interest in generative AI began with the launch of ChatGPT in late 2022, creating increased demand for Nvidia GPUs, which led to triple-digit earnings growth over the last six quarters and an 840% share price increase in the past two years.
Despite some investor concerns that generative AI represents a temporary trend, Huang emphasized at CES that this technology is just the beginning of a broader revolution. He stated, “The next frontier of AI is physical AI,” which aims to facilitate interactions with the physical world. Huang noted that while generative AI generates media, physical AI will enable machines to navigate and interact in real environments. The first form of intelligent robots most people will interact with is expected to be autonomous cars.
Nvidia has developed products to address all three layers of the autonomous vehicle computing stack. Its GPUs provide the supercomputing infrastructure necessary for training AI models; the Drive platform offers software development tools to create self-driving applications; and AGX systems deliver the in-vehicle computing power required for navigation.
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In a recent interview, Huang stated that Nvidia’s autonomous driving products may achieve a revenue run rate of $5 billion this year, markedly higher than the $1.8 billion reported in the last quarter. Currently, the automotive and robotics segments represent the company’s smallest areas, but growth is anticipated. Citigroup projects that the number of autonomous vehicles will increase nearly five-fold by 2030 and fourteen-fold by 2035.
During his CES address, Huang also remarked, “The ChatGPT moment for robotics is coming.” He introduced Cosmos, a suite of pretrained robotics models available for developers to fine-tune. Nvidia’s offerings span all three layers of the robotics computing stack as well: GPUs provide the necessary supercomputing power for training robotics models; the Isaac platform supports development across various applications, including industrial manipulation, autonomous vehicles, and humanoid robots; and Jetson embedded systems integrate GPUs, CPUs, and memory into a single unit for robot interaction with their environments.
Nvidia is ideally situated to capitalize on the evolving landscape as AI progresses into robotics. Citigroup estimates spending in the robotics sector could exceed $200 billion by 2035 and $1 trillion by 2040.
Regarding Nvidia’s stock performance, many investors perceive it as expensive, noting an 840% return over two years. However, shares currently trade at 55 times earnings, a reasonable valuation considering projected earnings growth of 38% annually over the next three years, resulting in a price-to-earnings-to-growth (PEG) ratio of 1.4. In contrast, two years ago, the stock traded at 63 times earnings, with anticipated earnings growth of 22% annually, resulting in a much higher PEG ratio of 2.9. Therefore, Nvidia’s stock is relatively cheaper today than it was before the generative AI surge.
Featured image credit: Nvidia
