Nvidia (Nvda -0.75%)) has become used to capitalizing on lucrative growth trends over the years, and it seems that the company is now on the way to getting the most out of another massive market which currently makes its first growth phases.
Personal computers (PC) to games to the exploitation of high performance cryptocurrency (HPC) and now Artificial Intelligence (AI)Nvidia managed to strike gold on several final markets which have now helped him to become the third company in the world (when writing this document). It seems that the company will add the automotive activity to this list.
In this article, we will take a closer look at where Nvidia automotive activities will be at the moment and check why it could become the next major growth engine for the company.
Nvidia automotive activities should walk on gas
NVIDIA finished exercise 2025 (which ended on January 26) with an automobile turnover of $ 1.7 billion, an increase of only 5% compared to the previous year. However, this company exploded considerably during the last quarter of the year, revenues have more than doubled in the quarter of the previous year.
For the future, Nvidia expects its automotive income to reach $ 5 billion during the year 2026. It would be a jum of almost 3 times compared to the previous year. The reason why Nvidia is confident to achieve such impressive growth in its automotive activities this year is due to the rapid improvement of the company’s solutions by the main car manufacturers and component suppliers.
Earlier this year, the company announced a partnership with ToyotaStressing that the world’s largest automaker in the world “will build its new generation vehicles on Nvidia Orin performing the certified NVIDIA Driveos”. Meanwhile, an autonomous technological company Dawn And the German Automobile Component Giant Continental will also deploy the company Drive Thor computer system for the launch of driver -free trucks.
Above all, this is not the only place where Nvidia wins in the automotive segment. Hyundai has selected NVIDIA solutions to develop autonomous driving systems in simulated environments. In addition, the Korean automotive giant will also use the Nvidia Twin Digital Omverse platform for product design and the creation of prototypes. Hyundai also plans to use Omovers to optimize its existing and future manufacturing facilities to “improve production quality, rationalize costs and improve the efficiency of overall manufacturing”.
And now, a car giant General Motors announced a partnership with NVIDIA to optimize its factory planning. GM will also use the NVIDIA training platform to develop advanced driver systems (ADAS) as well as improve the safety of its vehicles. Nvidia’s Blackwell -based AGX system based in Blackwell was also selected by giant car components Magna International To integrate AI capabilities into vehicles.
These partnerships show that car manufacturers and component suppliers are increasingly turning to NVIDIA to develop new generation vehicle technologies and refine their factory operations with digital twins. During his investor day held in 2022, Nvidia stressed that he saw a massive addressable opportunity worth $ 300 billion in the automotive space. For the prospect, it is greater than the opportunities of $ 100 billion he saw in the games at that time and equal to the income opportunity of $ 300 billion he described for his graphics cards and his flea systems.
The new partnerships that NVIDIA has recently announced have done the realization of the lucrative automotive opportunity, which is why the company expects its income from this segment to be triple this year. As such, it will not be surprising to see automotive activity becoming the next big pillar of long -term Nvidia growth, because the main companies in the world now use its technology.
More reasons to buy stock
There was a time when the game was the greatest source of income in Nvidia. Then came the data centers and AI, and this discussion suggests that the automobile could become the next big game for the company. However, investors will do well to note that AI is likely to remain a higher growth engine for Nvidia for a long time.
Business dominates the graphics card market in the data centerPutting it in a formidable position to capitalize on secular growth trends such as accelerated IT and IA inference. In addition, it is Make a bump on the company’s software market of the company Also. All this explains why analysts have continued to increase their growth expectations of the profits from this semiconductor giant in recent months.
NVDA EPS estimates for the current exercise data by Ycharts
Thus, the arrival of additional catalysts should ideally help Nvidia to maintain high long -term net growth levels, which is why the purchase of this technology technology could prove to be an intelligent decision, as it is negotiated at 26 times attractive term gains.
Hack Has no position in the actions mentioned. The Motley Fool has positions and recommends Nvidia. The Motley Fool recommends General Motors and Magna International. The Word’s madman has a Disclosure policy.