Nvidia's Rise in the Edge AI Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 23 hours ago
0mins
Source: Fool
- Edge AI Market Growth: Nvidia's physical AI revenue has exceeded $9 billion over the past twelve months, a 50% increase from $6 billion in fiscal 2026, indicating strong growth potential in edge AI applications that is expected to drive future revenue growth.
- Strategic Partnerships: Nvidia's collaboration with Uber will power a robotaxi fleet across nearly 30 cities and 4 continents by 2028, which not only strengthens its market position in physical AI but also lays the groundwork for future revenue growth.
- Expansive Market Outlook: Market research firm Counterpoint estimates that shipments of physical AI devices could reach 145 million units cumulatively between 2025 and 2035, primarily driven by robots, autonomous vehicles, and drones, providing Nvidia with significant market opportunities.
- New Product Line Expansion: Nvidia plans to sell its Vera server CPUs as standalone products, which is expected to generate an additional $20 billion in revenue this year, further expanding its $200 billion addressable market and enhancing the company's long-term growth prospects.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 214.250
Low
200.00
Averages
264.97
High
352.00
Current: 214.250
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Concentration: In Q1, Nvidia reported total revenue of $81.6 billion, with $75.2 billion coming from its data center division, indicating a strong reliance on this segment, which may lead the company to further shift focus away from gaming to enhance its competitive edge in data centers.
- Strong Capex Expectations: The four major hyperscalers are projected to spend around $650 billion on capital expenditures in 2023, with expectations to exceed $1 trillion by 2027, positioning Nvidia to benefit significantly from this massive spending, driving future growth.
- Significant Growth Rate: Nvidia's revenue grew by 85% year-over-year in Q1, a remarkable figure for a megacap company, suggesting that the market has yet to fully recognize its value; if valued similarly to peers, Nvidia's stock could be 2 to 3 times its current price, highlighting its undervalued potential.
- Increased Investment Confidence: With Nvidia's products at the core of a multitrillion-dollar infrastructure build-out, the unique combination of growth, value, and limited risk enhances investor confidence in its future performance, suggesting it will strongly outperform the S&P 500.
See More
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- Market Dominance: Nvidia's increasing dominance in the data center market indicates its growing competitiveness in AI technology, which could significantly impact future market dynamics.
- Potential Trillionaire: The rapid advancement of AI technology has sparked discussions about the possibility of the world's first trillionaire, suggesting immense wealth creation opportunities within the industry.
- Key Technology Supplier: A little-known company labeled as an 'Indispensable Monopoly' provides critical technology for both Nvidia and Intel, highlighting its importance and influence within the entire ecosystem.
- Investment Advice: Despite Nvidia's strong market performance, the analyst team identified 10 best stocks that do not include Nvidia, advising investors to carefully consider their investment decisions.
See More
Ritholtz Launches Concentrated Investment Portfolio Porterhouse
- Portfolio Innovation: Ritholtz Wealth Management has launched the Porterhouse portfolio, designed to capture the best market opportunities through a rules-based momentum strategy that emphasizes strong earnings growth and persistent share price strength, catering to clients seeking selective investments.
- Market Adaptability: The strategy does not rely on predicting market themes but leverages the collective judgment of investors, with Brown noting that market wisdom makes momentum strategies effective, capturing less obvious beneficiaries like Ciena, which has seen its stock soar over 140% in 2026 due to AI infrastructure buildout.
- Flexible Account Structure: As a separately managed account, Porterhouse offers flexibility not available in many momentum ETFs, allowing it to hold cash when stocks violate sell rules, thus avoiding holding declining stocks and protecting investor capital.
- Client Availability: Porterhouse will be available to qualified Ritholtz clients starting June 1, marking a significant step in the company's effort to provide more selective investment strategies and further solidifying its leadership in the wealth management sector.
See More
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- Market Performance: Last week, the S&P 500 and Nasdaq Composite rose over 1% and 2%, respectively, marking the S&P 500's ninth consecutive week of gains and the Nasdaq's eighth out of the last nine weeks, reflecting strong investor confidence in the market.
- Tech Stock Surge: Snowflake's quarterly earnings exceeded expectations and included a $6 billion AI compute deal with Amazon, leading to a more than 36% single-day stock price increase, which reignited enthusiasm across the tech sector and boosted stocks like Dell and Broadcom significantly.
- Cybersecurity Stock Volatility: Zscaler's disappointing earnings report resulted in its worst single-day performance, negatively impacting peers CrowdStrike and Palo Alto Networks; however, Okta's strong earnings report led to a 30% stock price jump, indicating ongoing demand in the cybersecurity sector.
- Middle East Situation's Market Impact: Despite mixed signals from the Middle East, rumors of peace progress between Iran and the U.S. spurred market gains, although the White House dismissed the reports, investor optimism still supported the stock market's upward trajectory.
See More
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- First Windows Computers: Nvidia and Microsoft are expected to debut the first Windows OS computers using Nvidia chips as the main processor next week, marking a significant collaboration that could drive demand for high-performance computing devices.
- Brand Collaboration: The new computers will include products from Microsoft's Surface brand as well as other manufacturers like Dell, which will help expand Nvidia's market penetration and enhance its position in a competitive landscape.
- Market Reaction: Although Reuters could not immediately verify the report, if true, it may generate strong consumer and enterprise interest in the new high-performance computers, potentially boosting sales of related products.
- Industry Impact: This launch could not only change consumer perceptions of Windows computers but also prompt other manufacturers to accelerate the adoption of Nvidia's technology, further solidifying its leadership in AI and graphics processing.
See More
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- Dividend Yield Advantage: The Schwab U.S. Dividend Equity ETF (SCHD) has delivered an average annual return of 9.2% over the past 50 years for dividend-paying stocks, which is double that of non-payers, indicating its ability to enhance returns while lowering volatility, making it attractive for income-seeking investors.
- Bond Market Coverage: The Vanguard Total Bond Market ETF (BND) holds nearly 11,400 high-quality bonds, with approximately 70% in U.S. government bonds and a current yield to maturity of 4.6%, providing investors with a steady stream of interest income while reducing portfolio risk, ideal for risk-averse investors.
- Utility Growth Potential: The Vanguard Utilities ETF (VPU) invests in 67 utility stocks, with U.S. power demand projected to grow by 60% over the next 20 years, positioning the ETF for strong growth, particularly with NextEra Energy, its largest holding, leading the charge in meeting AI-driven electricity demand.
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