Nvidia Stock Investors Receive Boost from CEO Jensen Huang’s Latest Comments
The recent keynote speech by Nvidia’s CEO, Jensen Huang, at CES 2025 has sent a positive signal to investors, highlighting the company’s product pipeline and its potential for growth in the autonomous driving and robotics sectors. This news comes as a welcome relief to those who have been concerned about the sustainability of Nvidia’s generative AI-driven earnings growth.
Nvidia’s journey to success began with the invention of the graphics processing unit (GPU) in 1999, which revolutionized the industry by providing fast and efficient rendering of graphics for 3D design and gaming applications. However, it is the company’s recent foray into complex data center workloads like training large language models and running generative artificial intelligence applications that has propelled it to unprecedented heights.
The launch of ChatGPT in late 2022 marked a significant turning point in the world of artificial intelligence, as its conversational capabilities went viral almost immediately. This sparked a surge in demand for Nvidia GPUs, leading to triple-digit earnings growth over the past six quarters and an impressive 840% increase in share price over the last two years.
Some investors have expressed concerns that generative AI may be a short-term catalyst or even a bubble, but it is essential to recognize that this technology will continue to play a crucial role in shaping our digital landscape. As Jensen Huang emphasized at CES, "The internet has only become more essential since its creation, and artificial intelligence will be no different." This sentiment is echoed by Citigroup’s estimate of a 5-fold increase in autonomous vehicles by 2030 and a 14-fold increase by 2035.
Physical AI: The Next Frontier
At the heart of Jensen Huang’s keynote speech was his vision for physical AI, which promises to take artificial intelligence beyond its current capabilities. Physical AI will enable robots to understand, navigate, and interact with the physical world, ultimately powering numerous types of autonomous robots, including cars, drones, and other machines.
Nvidia is uniquely positioned to capitalize on this emerging trend, as it has products that address all three layers of the autonomous vehicle computing stack: GPUs provide the supercomputing infrastructure needed for training AI models, while its Drive platform offers software development tools for building self-driving applications. The company’s AGX systems also offer in-vehicle computing power, allowing cars to navigate complex environments with ease.
According to Jensen Huang, Nvidia’s autonomous driving products may reach a revenue run rate of $5 billion this year, up from $1.8 billion in the last quarter. This growth is expected to accelerate as the number of autonomous vehicles on the road increases exponentially over the coming years.
Nvidia’s Robotics Revolution
As Jensen Huang pointed out at CES, "The ChatGPT moment for robotics is coming." To address this opportunity, Nvidia has developed Cosmos, a suite of pretrained robotics models that can be fine-tuned by developers. This platform builds on the company’s existing products, including GPUs, which provide the supercomputing infrastructure needed to train robotics models.
Nvidia’s Isaac platform offers code libraries and pretrained models for engineers developing robotics applications across three use cases: industrial manipulation arms, autonomous mobile robots, and autonomous humanoid robots. Jetson embedded systems bring together GPUs, CPUs, and memory on a single chip, providing the computing power required for robots to interact with the real world.
Citigroup estimates that spending on AI-powered robotics will top $200 billion by 2035 and reach an astonishing $1 trillion by 2040. As Nvidia is ideally positioned to benefit from this trend, its stock price may well be impacted positively in the long term.
Is Nvidia Stock Cheap Today?
Many investors assume that Nvidia’s stock is expensive due to its impressive returns over the past two years, but a closer look at the numbers reveals a more nuanced picture. Shares trade at 55 times earnings, which is a reasonable valuation given Wall Street’s expectation of 38% annual earnings growth over the next three years.
This gives Nvidia a price-to-earnings-to-growth (PEG) ratio of 1.4, compared to a PEG ratio of 2.9 just two years ago when shares traded at 63 times earnings and Wall Street anticipated 22% annual earnings growth. This means that Nvidia stock is actually much cheaper today than it was before the generative AI boom started.
Should You Invest in Nvidia Right Now?
Before making a decision, consider this: The Motley Fool’s Stock Advisor analyst team has identified 10 stocks they believe are poised for significant returns over the coming years. While Nvidia wasn’t one of them, its growth prospects and valuation make it an attractive long-term investment.
Citigroup’s estimates of exponential growth in autonomous vehicles and AI-powered robotics further support Nvidia’s potential for future success. As Jensen Huang emphasized at CES, "The next frontier of AI is physical AI," and Nvidia is uniquely positioned to capitalize on this emerging trend.
Conclusion
Nvidia stock investors have received a welcome boost from CEO Jensen Huang’s recent comments, highlighting the company’s product pipeline and its potential for growth in the autonomous driving and robotics sectors. As the world moves towards an increasingly digital future, Nvidia’s position at the forefront of AI innovation makes it an attractive long-term investment opportunity.
While there are valid concerns about the sustainability of generative AI-driven earnings growth, Jensen Huang’s vision for physical AI offers a compelling argument for continued growth in the years to come. With its strong product pipeline and valuation, Nvidia stock is poised for further success as the company continues to lead the charge in the world of artificial intelligence.