While the full impact of the AI revolution is still unfolding, Nvidia (NASDAQ:NVDA) is well-positioned to lead innovation in this space for the foreseeable future. As major tech giants intensify their investments in AI development, Nvidia is poised to reap substantial benefits from these initiatives.
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This is evident in Nvidia’s solid Q2 FY 2025 performance, where the data center division – its largest segment – generated $26.3 billion in revenue, reflecting a strong 155% year-over-year growth.
Although its data center division is the crown jewel of its AI empire, Nvidia’s success extends beyond just this revenue stream. In fact, investor Vinay Utham believes that Nvidia is on the cusp of unlocking significant value from other areas of operation as well.
Utham points out that Nvidia has multiple avenues for expansion in the coming years, including Sovereign AI collaborations with national governments. The recent partnership with Japan to build an AI-powered supercomputer is just one example of this potential.
However, the investor saves his most enthusiastic outlook for Nvidia’s efforts in the automotive sector, especially given the growing focus on self-driving cars.
“As automakers pivot towards building autonomous vehicles, the automotive division of NVDA is set for years, if not decades, of growth,” Utham opined.
The evidence is starting to accumulate, says the investor, as NVDA’s automotive and robotics segment generated $346 million in Q2, representing year-over-year growth of 37%. The growth was powered by “ramps in self-driving platforms and a surge in demand for AI cockpit solutions.”
In addition, the company’s latest version of its advanced driver-assistance platform, Thor, has already been adopted by a number of major players in the automobile sector.
While the AI revolution is attracting the most attention, Utham writes that there is a parallel process taking place in the automotive industry that is thirsty for big advances.
“NVDA, in my opinion, is one of those rare companies that stand to benefit from both,” the investor summed up.
Seeing a company that is “firing on all cylinders,” Utham rates Nvidia as a Buy. (To watch Utham’s track record, click here)
Overall, the market’s love affair with Nvidia shows no signs of slowing down. Over the past three months, the stock has received 39 Buy recommendations and just 4 Holds, earning it a consensus Strong Buy rating. With a 12-month price target of $151.79, this represents an upside of ~41%. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
