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Dominance in AI Data Centers
Nvidia (NASDAQ: NVDA) has emerged as the leader in AI infrastructure, thanks to its high-performance GPUs and the CUDA software platform, which make AI model development seamless. Data center revenue exploded from $4.3 billion in fiscal Q1 2024 to $39.1 billion in fiscal Q1 2026, nearly a 10x increase. With data center capex expected to exceed $1 trillion by 2028 and Nvidia holding over 80% GPU market share, it remains well-positioned in this space.
Nvidia (NASDAQ: NVDA) has become synonymous with the artificial intelligence (AI) infrastructure boom. Its graphics processing units (GPUs) have become the go-to chips for running AI workloads in data centers, thanks to their parallel processing capabilities.
Parallel processing allows chips to perform many calculations all at once, which is essential for both training large language models (LLMs) and running AI inference.
Just as important is Nvidia’s CUDA software platform, which makes it easy for developers to build and optimize AI models on its hardware.
The combination of best-in-class GPU performance along with a sticky software platform has helped cement the company’s lead in the data center space.
Nvidia isn’t just conquering autonomous vehicles—it’s winning over gamers too. For example, the ASUS TUF Gaming GeForce RTX 5070 OC—powered by Nvidia’s latest Blackwell architecture and DLSS 4—delivers aggressive frame-generation and ray tracing in an ultra‑durable, military-grade package. With a beefy 12 GB of GDDR7 memory, triple axial-tech cooling fans, and robust PCB coating, it’s built to sustain performance under heavy loads. Whether you’re rendering AI-generated content or powering through open-world games, this card ensures rock-solid stability and future-ready features like HDMI/DisplayPort 2.1 and PCIe 5.0 support—all while keeping temps and noise in check. If you’re already bullish on Nvidia’s automotive roadmap, here’s a bonus: the same GPU wizardry that fuels self-driving aspirations now enhances your gaming rig.
At this same time, though, Nvidia was also edging into another market: automobiles.
Over the past two years, its data center revenue has gone from $4.3 billion in the fiscal first quarter of 2024 (ended April 30, 2023) to $39.1 billion in fiscal Q1 of 2026 (ended April 27, 2025). That’s a nearly 10 times increase in just two years.
Nvidia sees data center capital expenditures (capex) rising to more than $1 trillion by 2028. Not all that spending will go toward GPUs, but with its more than 80% market share in the GPU space, Nvidia is well positioned to capture a sizable chunk of that overall data center spending growth.
However, that is not the only potential huge market that Nvidia is eyeing.
Nvidia’s Drive Platform: From Gaming to the Open Road
While AI data center spending is Nvidia’s largest market by far, it’s certainly not the only end market it participates in. The GPU was originally created to speed up graphics rendering in video games.
The company later created CUDA as a way to expand beyond this market, giving developers an easy way to program its GPUs for other tasks.
However, the market for GPUs outside of video games was slow to develop. Around the same time CUDA was introduced, Advanced Micro Devices bought rival GPU maker ATI Technologies.
With integration a top priority and not a lot of early traction outside of video games for GPUs, AMD was in no rush to create a competing software platform.
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Nvidia’s Automotive Push
While gaming and data centers were early growth drivers, Nvidia has also been building its presence in the automotive sector. Its DRIVE platform—used for autonomous driving and smart vehicle systems—is being adopted by major automakers like Mercedes, Volvo, Hyundai, Toyota, and even Waymo. Auto revenue jumped 72% to $567 million last quarter, and Nvidia projects $5 billion in auto revenue for this fiscal year as new vehicles featuring its tech hit the market.
Despite the slow uptake, Nvidia smartly began pushing CUDA for use in universities and research labs, which helped make it the default software program that developers were taught to program GPUs.
Today, that is why Nvidia’s GPUs have a dominant place in the data center.
At this same time, though, Nvidia was also edging into another market: automobiles. In fact, Audi was one of its first big customers outside of the video game space.
The German luxury carmaker began using Nvidia’s 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 developers need for advanced driver-assistance and autonomous vehicle development.
Autonomous Driving Is No Longer Science Fiction
While long promised, autonomous driving is finally here. Alphabet’s Waymo, for example, is now providing more than 250,000 paid robotaxi rides per week in the U.S. It’s currently only in a few cities, but it’s expanding rapidly. According to reports, Waymo uses Nvidia’s GPUs in its vehicles.
Waymo is not Nvidia’s only automobile customer — far from it. Mercedes, Volvo, and Hyundai all use Nvidia’s DRIVE platform and GPUs to power self-driving technologies, while Toyota announced it would use Nvidia’s platform and chips for advanced driver assistance features in its next-generation vehicles.
Meanwhile, General Motors and Hyundai will use Nvidia technologies to improve their manufacturing with “smart factory” initiatives.
Last quarter, Nvidia saw its automobile revenue surge 72% to $567 million. However, more growth is in store, with the company forecasting its auto revenue to rise to approximately $5 billion this fiscal year. The growth will come as new vehicles using its technology begin to hit the roads. Mercedes’ new CLA sedan is the latest vehicle with its technology.
From Niche to Mainstream: The Scale of the Auto Opportunity
It’s easy to dismiss a segment that was only a fraction of its data center revenue last quarter, but with the data center, Nvidia showed how quickly end markets can ramp up. The autonomous driving market is still in its infancy, so the opportunity is just massive.
With Waymo having just around 1,500 robotaxis now, it’s easy to see that this could scale to 100x or more vehicles when it reaches scale.
Meanwhile, Nvidia CEO Jensen Huang has predicted that every car on the road will eventually be robotic. With more than 1 billion cars on the road, that’s a huge opportunity.
At its investor day in 2022, Nvidia estimated the auto market could be a $300 billion opportunity.
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A Hidden $300 Billion Opportunity
Though small today compared to its data center business, Nvidia’s auto segment has huge long-term potential. CEO Jensen Huang believes every car will eventually be robotic. With over 1 billion cars on the road, Nvidia sees a $300 billion auto market opportunity. Despite its strong fundamentals, Nvidia’s current valuation (forward P/E of 33 and PEG ratio of 0.7) suggests that this future auto growth isn’t fully priced in yet, making it a possibly overlooked catalyst for investors.
Valuation Still Leaves Room for Growth
With Nvidia’s stock trading at a forward price-to-earnings ratio (P/E) of 33 times this year’s analyst estimates and a 0.7 price/earnings-to-growth (PEG) ratio, with numbers below 1 considered undervalued, the stock is currently not pricing in any potential upside from its next big potential market opportunity.
Should Investors Pay Attention?
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Final Thoughts: Not Just an AI Powerhouse Anymore
While Nvidia’s success in AI data centers has been nothing short of spectacular, the company’s automotive segment is rapidly evolving into its next major growth driver. With current revenues still a fraction of its data center division but projected to grow to $5 billion this fiscal year, the signs are there.
The long-term vision—every car on the road eventually being robotic—opens up a multibillion-dollar frontier. The DRIVE platform, deeply embedded in new vehicle models from companies like Mercedes, Toyota, and GM, is primed to take a lead in this transformation.
As the world shifts gears towards autonomy and smarter mobility, Nvidia may once again find itself at the center of another seismic market transformation—one that, for now, remains vastly underappreciated by Wall Street.
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Adapted heavily from The Motley Fool article: “Nvidia Stock: Forget AI Data Centers, Is This Market Nvidia’s Next Big Growth Driver?”
