NVIDIA’s (NVDA) New Thor Processor is Set To Dominate Autos and Robots

Stock (Symbol)

NVIDIA (NVDA)

Stock Price

$168

Sector

Data is as of

Expected to Report

Company Description

The Company is engaged in accelerated computing to help solve the challenging computational problems.

The Company’s segments include Compute & Networking and Graphics.

The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services.

The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications. Source: Refinitiv

Sharek’s Take

NVIDIA was originally focused on the computer graphics market, and invented the first graphics processing unit (GPU) in 1999 which  made the company the leader in computer graphics. The company introduced its CUDA programming model in 2006 and ushered in parallel processing of its GPU for high-performance computing that could be used in fields including aerospace, biotechnology, and energy exploration. NVDA has since expanded its architecture to scientific computing, artificial intelligence, data science, autonomous vehicles, robotics, and virtual reality (or AR). NVIDIA’s rapid growth is driven by its Data Center segment, due to the strong demand for Generative AI platforms.

The NVIDIA DGX platform is the world’s first AI supercomputer. Here’s how it works:

• Hopper: Built with 80 billion transistors, Hopper is the world’s most advanced chip ever built.
• H100 GPU: The H100 server is built with Hopper GPUs. H100s cost roughly $30,000 each.
• The DGX GPU: The DGX H100 is eight H100 modules working as one giant GPU. All in a compact box that’s 14″ x 19″ x 36″. A DGX server with 8 H100s costs around $300,000.
• AI Supercomputer: Then, hundreds or even thousands of NVIDIA DGX nodes connect to become an AI supercomputer. Thus, 100 DGX 8-H100 servers could be $30 million, 1000 servers might be $300 million. This is the blueprint for AI factories worldwide.
• Blackwell: NVIDIA’s next-generation GPU architecture launched in 2025 is designed to surpass Hopper with enhanced performance, scalability, and energy efficiency, tailored for massive AI workloads.

NVDA has four operating segments : Gaming, Data Center, Professional Visualization and Auto. Here are segment stats from last qtr:

1. Data center: 88% of total company revenue, +56% growth y.o.y.
   • This segment is comprised of data center platforms, large Enterprise IT systems, and cloud computing networks.
   • Record adoption og Blackwell and Clackwell Ultra platforms GB300 ramp underway.
   • Strong demand for Hopper GPUs alongside widespread GB200/GB300 deployment.
2. Gaming: 9% of total revenue, +52% growth y.o.y.
   • NVDA gaming platforms have historically given video gamers sharper, smoother, higher-quality graphics with its GeForce line.
   • Increase was primarily driven by GeForce RTX 5060 GPU launch and Blackwell-based GeForce ramp.
3. Professional Visualization: 1% of total revenue, +32% growth y.o.y.
   • This segment is digital content creation, including professional video editing, special effects for films, architectural design, and product manufacturing.
   • Growth fueled by RTX Workstation GPUs and AI-powered workflows.
4. Auto: 1% of total revenue, +69% growth y.o.y.
   • NVIDIA Drive is a complete solution for the Autonomous Vehicle market, including infotainment systems and autonomous driving.
   • Growth driven by launch of NVIDIA Thor SoC, enabling higher levels of autonomy.

NVIDIA is in a golden era of a universal upgrade in computing. The company breaks down the four previous eras as (1) PC lead by IBM, (2) Internet, (3) Mobile & Cloud lead by the iPhone, and (4) AI. Analysts give NVDA an Estimated Long Term Growth Rate (Est. LTG) of 34%. I consider NVDA a rapid grower, which in my opinion is a company growing year-over-year profits 65% or greater. Management even buys back stock and pays a small dividend. In 2024, management spend $10 billion to repurchase its stock and spent another $400 million in dividends. NVIDIA is the top holding in my Growth Portfolio and Aggressive Growth Portfolio.

One Year Chart

NVIDIA has been hanging around $175.

This stock has a P/E of 37. That’s a nice P/E and around where I think it should be. The P/E was 32 last quarter. Note, my Fair Value is a P/E of 40.

The Est. LTG is 34% is down from 50% 2QtrsAgo. The Est. LTG is analysts’ 3-5 year guess of annual profit growth (not stock growth).

Quarterly profit growth has been rapid the past 4 qtrs. And Estimates are for rapid growth to continue.

Earnings Table

Last qtr, NVIDIA reported 67% profit growth and beat estimates of 57%. Revenue grew 56% and beat analyst’s estimates of 51%.

• In Data Center, Networking revenue increased 98% year-over-year, led by Spectrum-X Ethernet, InfiBand, and NVLink. Sovereign AI revenue surpassed $20B, more than doubling from last year. Infiband revenue nearly doubled sequentially.
• China remained constrained by H20 exporting licensing. Singapore represented 22% of billed revenue.
• In Gaming, GeForce Now doubled its catalog to 4,500 titles and will debut RTX 5080-class performance in September.
• In Professional Visualization, RTX Pro servers entered full production, positioned as a multibillion-dollar product line.
• In Automotive, Full-stack Drive AV software entered production, creating new AV and robotaxi revenue opportunities. Thor is NVIDIA’s most successful robotics/AV computer to date.

Annual Profit Estimates increased this qtr, but 2025 estimates have been rather stable the past year. From $4.43 4QtrsAgo to $4.49 this qtr. That’s not impressive. Note, estimates fell last qtr due to US restrictions on sending chips to China.

Qtrly Profit Estimates for the next 4 qtrs are 53%, 58%, 56%, and 50%. That’s impressive. For next qtr, analysts predict revenue will climb 56% year-over-year.

Fair Value

NVDA has a P/E of 37. My Fair Value is a P/E of 40

My Fair Value for this stock is $180, giving the stock 7% upside from the recent quote of $168.

There’s ample upside for 2026 — 51% — as my guess is the stock could be $255 by then.

Bottom Line

NVIDIA (NVDA) stock has had a rocky decade.

Meanwhile, the 2022 slump was due to a downturn in sales in the Gaming division as (1) businesses were flush with cash in 2021 and had already upgraded computers and (2) Bitcoin miners found it unprofitable to mine with lower crypto prices combined with high electricity costs.

In January 2023 the stock pushed past $20 and ended that year at $50 as Datacenter sales pushed higher due to AI investments. 2024 was also great as the shares went from $50 to 134.

NVIDIA is still the top stock in my universe. It’s a large company that’s at the center of AI buildouts. And buildouts have been strong lately. Looking ahead, NVIDIA sees the next big opportunity in Robots.

NVDA ranks first in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings.

Power Rankings

1 of 33

Aggressive Growth Portfolio

1 of 13

Conservative Stock Portfolio

N/A