Nvidia (NVDA 4.00%) It was once known as a company that enhances games and graphics. The tech giant has developed a graphics processing unit (GPU), a chip that handles many tasks simultaneously. This allows for superior speed and makes games come to life on screen.
Today, Nvidia still leads the gaming world, but this is no longer its biggest business. Instead, I moved on to another industry that currently has momentum and is likely to continue gaining momentum in the coming years. In fact, his Nvidia revenue from this particular market has increased by over 1,000% in just four years. Let’s take a closer look.
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In 2006, Nvidia introduced CUDA. This is a programming model that allows the GPU to be used for almost any task. This expanded Nvidia’s revenue potential and allowed the company to get into the business of artificial intelligence (AI) before the technology captured the world’s attention. I think of a business that has experienced tremendous growth over the last few years.
As shown in the Statista graph below, Nvidia’s revenue from computing and networking, including AI systems and high-performance computing, has surged 1,345% over the past four years to more than $47 billion in fiscal year 2024 reached. Back in 2020, graphics, including games, were the company’s biggest source of revenue, but that is no longer the case, although graphics revenue has increased since then.
Expanding profit opportunities
In other words, Nvidia’s overall revenue opportunity has expanded, led by AI products and services. It is recognized as the data center business in the company’s earnings report, and the division has reported record revenues in recent quarters. This also brought the company’s total revenue to an all-time high.
What does this mean for investors? Nvidia is the leader in the AI chip market, and the growth of this technology is just beginning. So investors interested in betting on AI winners might consider buying stock in this exciting technology company.
Adria Cimino has no position in any stocks mentioned. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
