This Is Nvidia's Next Trillion-Dollar Opportunity, According to Jensen Huang -- and It's Something You Might be Overlooking
The majority of Nvidia's revenue comes from its data center business, thanks to booming sales of its industry-leading artificial intelligence (AI) chips.
Nvidia CEO Jensen Huang thinks autonomous vehicles could be the next trillion-dollar opportunity for the company.
According to a forecast from Huang earlier this year, Nvidia's automotive revenue could triple during fiscal 2026.
10 stocks we like better than Nvidia ›
Nvidia (NASDAQ: NVDA) generated more than $44 billion in revenue during its fiscal 2026 first quarter (which ended April 27), with $39.1 billion of that total coming from its data center business alone. The company sells the most powerful graphics processing units (GPUs) in the world for data centers, and they are the chips every artificial intelligence (AI) developer wants to use.
Nvidia CEO Jensen Huang thinks AI data center spending will top $1 trillion per year by 2028, but he's eyeing another trillion-dollar opportunity: autonomous vehicles. The company's automotive segment is often overlooked by investors because it contributes a minuscule amount of revenue compared to the data center segment, but that could soon change if Huang's recent forecasts come to fruition.
Besides sensors and other advanced hardware components, a self-driving car requires AI software which is trained on millions of hours of real-world data to ensure it's equipped to safely deal with every possible scenario when sharing the road with other vehicles and pedestrians. Building a roadworthy autonomous vehicle isn't easy, and only a small handful of companies are having success.
Alphabet's Waymo is completing more than 250,000 paid autonomous ride-hailing trips every week in San Francisco, Los Angeles, Phoenix, and Austin, and Tesla hopes to have its autonomous robotaxi on the road in California and Texas this year. Both of these companies have invested billions of dollars in developing proprietary autonomous hardware and software, but many car manufacturers don't have the expertise or the financial resources to compete.
That's where Nvidia's Drive platform comes in. It's a complete hardware and software solution that includes the powerful Thor chip, which processes data from the car's sensors to make lightning quick decisions on the road. It's gaining serious traction, with top brands like Mercedes-Benz, Toyota, General Motors, Rivian, and Volvo choosing to adopt it.
Back in January, Jensen Huang said self-driving cars could be the first multitrillion-dollar segment of the AI powered robotics industry. Then, in a more recent interview with CNBC in June, he said this could be the decade of autonomous vehicles (and autonomous machines in general), which suggests these technologies might be on the cusp of going mainstream.
As I mentioned at the top, the data center business is the dominant contributor to Nvidia's revenue. During the first quarter of 2026, the automotive segment generated $567 million in revenue, accounting for just 1.3% of the company's total.
However, earlier this year Jensen Huang said Nvidia's automotive revenue could come in at $5 billion for the whole of fiscal 2026, which would be a whopping 194% increase from its fiscal 2025 result of $1.7 billion. But that's not all, because car manufacturers are starting to invest heavily in Nvidia's other products to customize and refine their self-driving offering in order to stand out from the competition.
Huang says many car makers are buying Nvidia's DGX data center systems fitted with the latest Blackwell GPUs, so they have enough computing power to continue improving their self-driving AI models. Plus, they are using Nvidia's multimodal foundation model called Cosmos, which is pre-trained on more than 20 million hours of video, so it already has a comprehensive understanding of the physical world.
Cosmos can be used to run millions of simulations using synthetic data, which can be used to further train self-driving models. In other words, it reduces the need to collect data from real-world driving, which can be a cumbersome and time consuming process. The new Cosmos Predict-2 models offer deeper functionality and faster throughput to deliver even better results.
According to Wall Street's consensus estimate (provided by Yahoo! Finance), Nvidia could deliver $199 billion in total revenue during fiscal 2026. Therefore, even if its automotive revenue triples to $5 billion, it would still be a very small part of the overall business. Investors who buy Nvidia stock today are still doing so for the strength of its data center segment.
Nevertheless, this could be a great entry point for investors who believe autonomous driving will eventually be a multitrillion-dollar opportunity over the long term as Huang expects, because Nvidia stock is quite attractive at the current level. It's trading at a price-to-earnings (P/E) ratio of 46.4, which is a 23% discount to its 10-year average of 60.
Plus, Wall Street thinks Nvidia's earnings per share could grow to $4.29 during fiscal 2026, placing its stock at a forward P/E ratio of 33.5:
That means if Wall Street's forecast proves to be accurate, Nvidia stock will have to climb 38% over the next 12 months or so just to maintain its current P/E ratio, and it would have to soar by 79% to trade in line with its 10-year average P/E ratio of 60. But investors might want to focus on the longer term considering autonomous driving has the potential to become yet another trillion-dollar opportunity for the company.
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!*
Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of June 23, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
This Is Nvidia's Next Trillion-Dollar Opportunity, According to Jensen Huang -- and It's Something You Might be Overlooking was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
23 minutes ago
- Forbes
AI Is Transforming Retail. Here's How Small Businesses Can Benefit.
AI is transforming the retail industry but can offer many benefits for small businesses From changing the way customers search for products to sparking debates on the growing use of AI in high-profile advertising campaigns, the impact of AI on the retail industry is evident. While the pace of change may seem daunting for small retail businesses that lack the large budgets of their corporate counterparts, there is a real opportunity for these businesses to leverage AI to save money and time, maximize the potential of their teams, and market to today's consumers in powerful ways. What types of tasks should retailers be looking to improve with AI? According to Arnaud Gallet, director of the National Retail Federation's Retail's Big Show Europe, the key to leveraging AI in small businesses without huge budgets is focusing on 'low-barrier, high-impact use cases that improve efficiency and customer experience.'AI personalization at scale AI personalization at scale is a perfect example of this type of use case. 'What used to require a dedicated team to pull customer data, build manual segments, and write dozens of message variants can now be done by one person in a few clicks', explains Adil Wali, chief product officer of marketing automation company Klaviyo. The use of AI can help create 'smarter, more granular segments based on behavior.' The benefits of this approach are clear, with improved conversion rates and higher customer satisfaction compared to more traditional methods of blanket messaging to an entire email list, regardless of current and past behaviour. As Wali puts it, 'it's not just about efficiency, it's about unlocking the kind of marketing that builds lasting relationships'. For small businesses, this is 'levelling the playing field…surfacing insights that were previously hidden in data'. It's not replacing teams of people; it's adding capabilities that were previously out of reach for small businesses. Teams can respond in real-time, providing customers with a more personalized experience that feels to improve the efficiency of repetitive tasks The most significant opportunity for small businesses lies in streamlining or enhancing some of the most basic and repetitive tasks while improving the overall customer experience. 'Practical starting points include using AI to generate or refine product descriptions with tools like ChatGPT, Jasper, or Shopify Magic, improving SEO and saving time,' shares Gallet. Gallet goes on to highlight that everything from FAQs and basic support tasks can be outsourced to 'AI chatbots'. In contrast, 'dynamic FAQs and help articles can be maintained with platforms like Notion AI,' and 'AI-powered apps on tablets or smartphones for instant access to product info and stock levels' can empower store staff. While these may not be the most revolutionary uses for AI, they offer the benefits of being practical, easy to implement, and straightforward to measure in terms of improved efficiency. As Gallet explains, 'The common thread isn't flashy tech—it's smart, customer-first applications of AI that respect the brand's voice and the customer's trust.'AI and declarative commerce Software company Shopify is looking beyond improving the efficiency of repetitive tasks and is experimenting with 'declarative commerce'. Deann Evans, Shopify's managing director for EMEA explains declarative commerce as 'rather than instructing software on what to do - such as setting up a campaign or editing a storefront', instead allowing business owners to 'express what they want to achieve - such as creating a campaign to attract new customers - and letting the technology take care of the execution.' This shift, moving from 'commands to intent', lies behind Shopify's new Horizon theme, which allows users to 'just describe your vision, and AI creates the design'. 'This new approach, where platforms respond to business goals, not just manual tasks, could become the next great inflection point in retail strategy, ' states Evans. It is also a perfect example of how AI can make life easier for time-poor small business owners who want the result without having to work through the technical in retail - transparency builds trust While AI offers significant advances for small businesses and enormous opportunities for improving efficiency, there are key considerations that need to be taken into account to incorporate AI in a way that avoids 'compromising customer trust or weakening brand image,' according to Gallet. 'This involves using clear editorial guidelines to ensure that AI-generated content stays true to the brand's universe,' he elaborates. Another key consideration? Transparency. 'Customers should be informed when AI is used, especially in automated customer service or personalized campaigns'. Big retailers are already navigating this and can serve as inspiration. Gallet highlights online retailer Zalando, which 'uses AI to solve real customer pain points, like size and fit, while being transparent about when and how AI is involved—proving that clarity builds trust.' AI in retail - the road ahead While small businesses must navigate the potential pitfalls of AI, by taking actions such as having clear policies in place to collect and use data correctly, there is a massive opportunity for AI to make them more efficient and profitable. AI offers 'the capabilities to boost loyalty, streamline discovery and create seamless onsite experiences, without the need for vast technical budgets and expertise,' as Evans puts it. And with declarative commerce becoming a reality, she goes on to envision a future 'where merchants simply express their goals and watch as their tools and systems orchestrate the necessary changes across their entire business….It's retail, re-imagined.'
Motor Trend
28 minutes ago
- Motor Trend
$10K Replacement? Debunking Myths About What Happens When EV Batteries Go Bad
There's a lot to love about owning an EV. Electricity is cheaper than gas and electric motors are more efficient, so EVs are less expensive to run, and with lower maintenance costs on balance, they're easier to operate in the long run. Studies even show that they're less stressful to drive than a car with a traditional internal combustion engine. EV battery replacements are less common and costly than often claimed. Most EVs have warranties up to 8-10 years, covering significant costs. Battery prices are dropping due to domestic production. Compared to engine replacements, EV battery costs are increasingly competitive. This summary was generated by AI using content from this MotorTrend article Read Next Yet a lot of people seem to hate them. One of the most common bits of anti-EV rhetoric we constantly see shared on social media platforms and elsewhere is that their batteries can't be trusted. According to the experts on Facebook, they'll wear out in just a few years and leave you stuck with tens of thousands in replacement costs. This largely false narrative has proven effective. A recent study from GBK Collective concluded that battery replacement costs are the biggest concern among those considering the purchase of an EV or hybrid. But is that really something to be worried about? Is the battery in a new EV really as fragile as one in a new smartphone, and are you really on the hook for a huge bill if it fails? Let's dig into the details. No, It's Not Like Your Phone Battery Most of us have no doubt experienced the rapid degradation of our phone batteries at some point. It seems like it only takes a few months before your new iDevice starts struggling to get through a single shift at work. Will the battery in an EV suffer the same fate because it uses the same type of battery? Virtually all smartphones these days (and plenty of other consumer electronics devices) rely on lithium-ion batteries. This term refers to the major component of the cathodes in their cells: lithium. (If you need a little battery refresher, we have that for you right here.) And yes, the majority of EVs in production today also use lithium-ion cells. They tend to be the most energy-dense option that's widely available today, which makes them an ideal choice for a car that wants to go as far as possible while keeping battery weight to a minimum. So, same-same as your phone? Not exactly. "There's absolutely no need to be worried about a super-steep decline like what you would see in a cellphone," Liz Najman said. She's director of market insights at Recurrent Motors, an EV-focused platform for EV owners and shoppers. Despite using the same chemistry, EV batteries have numerous substantial differences relative to those in phones, starting with their quantity. Phones generally have a single battery cell, just one source of energy while the phone is in use and one place to store it when it's charging. Your average EV has hundreds or even thousands of individual cells that make up its battery pack, often grouped into so-called modules. This means that charge and discharge cycles are evenly distributed across many individual batteries, all sharing the load. Temperature is another consideration. Ever felt how hot your phone gets when it's charging? Nearly all modern EVs feature some sort of active thermal management to keep their battery packs in their happy place from a temperature standpoint. And then there's the frequency of charging. Most folks run their phone down to near empty and then fully recharge every single day. A modern EV with 200 or 300 miles of range might only need a full charge once a week. Or, if charged more frequently, those charges tend to be smaller. Either way, it's far less stressful for your pack, meaning it'll last longer. However, the most significant difference between a car battery and a phone battery may be the warranty. A good warranty is key whenever you're thinking about buying a new car, particularly if it's from a brand unfamiliar to you. That's doubly true when you're thinking about making the leap to an unfamiliar EV. Thankfully, battery warranties across the board are generous enough that you should feel protected. Every EV sold in the United States comes with at least an eight-year, 100,000-mile warranty. Live in California? You're protected for even longer: 10 years or 150,000 miles. Some do even better, like Rivian, which covers up to 175,000 miles. If, after that period, your battery cannot sustain a certain percentage of its original charge (usually 70 percent), you're set to get a replacement. It's worth pointing out that you're not guaranteed to get a new battery if yours doesn't meet the 70 percent threshold. You may receive a remanufactured one, but either way, you're not on the hook for the cost, and you're at least guaranteed to have a car that's still capable of achieving 70 percent of its former maximum range after eight years. And chances are, you'll do better than that for even longer. Recurrent's most recent research showed that, outside of major recalls (like the Chevrolet Bolt debacle), only 2.5 percent of EVs have had battery replacements. So it's unlikely, but it does happen. And if it happens to a car out of warranty, it might not be as expensive to replace one as you think. Batteries are Getting Cheaper The perceived boom in EVs may be taking a little longer than anticipated, but that isn't slowing down the supply chain build-up. It seems like every day, we hear about a new battery factory being built on American shores, bolstered by the need for domestic production to meet the present federal EV rebate regulations, not to mention lessening the potential impact of the current administration's tariff-based actions. On top of that, there's been a huge rush to find more of the materials needed for battery production domestically, as well. As we've reported before, many of these materials have numerous issues with how they're sourced, so getting them locally should make that even easier. More domestic production and sourcing of materials will only make these batteries cheaper in the future. Recurrent's Naijman believes that these factors, plus the rise of more affordable chemistries like LFP and potentially GM's new LMR, could mean the cost of replacing a battery by 2030 will be cheaper than replacing an engine. We also spoke with Ian Nalivaiko, business development executive at Greentec, a company that has replaced tens of thousands of hybrid and EV batteries over the past 13 years. Nalivaiko said that battery prices are already dropping substantially for some models. A replacement 75-kWh pack for a Tesla Model S until recently cost $10,000. Today, he says it's down to $5,999. But that's just one car. Let's look at some more examples. Battery Replacement Costs Just like not all engines are created equally, different cars have very different battery costs. Greentec services all sorts of hybrids, plug-in hybrids, and EVs, and some are easier than others. Nalivaiko said the car they most commonly service is the second-generation Prius, a battery swap that'll cost as little as $1,399. What about full EVs? There, too, it depends. The 75-kWh Tesla pack for $5,999 is definitely among the more affordable options. But the bigger 100-kWh battery pack can cost as much as $15,500. You can even go up to a bigger pack if you'd like. Greentec says it's reverse-engineered Tesla's battery management system, enabling upgrades—or downgrades. "With the Teslas, we've basically figured it out," Nalivaiko said. Engine Replacements vs. Battery Replacements While some of those battery replacement costs may seem high in a vacuum, to get a better appreciation for how this stacks up, it's good to consider the internal combustion equivalent: a new engine. Like swapping an EV's battery, replacing an engine in a modern car isn't a task that's easily accomplished by the average shade-tree mechanic. Likewise, it's not often something that's a good return on investment when it comes to an older car. Still, it's the closest equivalent we have to replacing an EV battery, so we used Kelly Blue Book's repair estimator to determine some comparable engine replacement costs. KBB estimates that the engine replacement cost for a Nissan Altima would be in the range of $6,000 to $6,500, quite a bit more than the $5,000 for a new battery pack on a similarly aged Nissan Leaf EV. When it comes to Tesla, that 75-kWh battery pack for a Model S, again, costs about $6,000. A comparable Mercedes-Benz, an E400, will set you back between $7,500 and $8,000 for a new engine. For the Leaf, that replacement cost is probably more than the car is worth. But for the Model S 75D, probably still worth $20,000 or so, $5,999 for a new pack could be great value. It opens the door for some used car bargain hunting—if you're willing to go through the legwork of getting the battery replaced (a process that Greentec's Nalivaiko says typically takes between one to three weeks). "If you wanted to get [a used EV] at a steep discount and invest that money to replace the battery, you could have a luxury car that's going to last you for the next 15 years at a great price," Recurrent's Najman said. As always, there are no absolutes when it comes to how much it will cost you to service a car over its lifetime, regardless of powertrain. But for EV batteries, at least, one thing is clear: The chances of you shelling out thousands to replace one for a newer car especially is remote at best—despite what you may have heard from the experts on social media.
Business Wire
36 minutes ago
- Business Wire
Brandywine Global – Global Income Opportunities Fund Inc. (NYSE:BWG) (the 'Fund') Announces Portfolio Management Team Update
NEW YORK--(BUSINESS WIRE)--Effective December 31, 2025, it is anticipated that David F. Hoffman, CFA will step down as a member of the portfolio management team for the Fund. Thereafter, Mr. Hoffman will transition to an advisory role with Brandywine Global Investment Management, LLC ('Brandywine Global'). Effective July 31, 2025, Paul Mielczarski will become a member of the Fund's portfolio management team, which will consist of the members listed below: Jack P. McIntyre Brian L. Kloss Anujeet Sareen Tracy Chen Paul Mielczarski Data and commentary provided in this press release are for informational purposes only. Franklin Resources, Inc. and its affiliates do not engage in selling shares of the Fund. For more information about the Fund, please call Fund Investor Services: 1-888-777-0102, or consult the Fund's website at The information contained on the Fund's website is not part of this press release. Hard copies of the Fund's complete audited financial statements are available free of charge upon request. The Fund's shares are traded on the New York Stock Exchange. Similar to stocks, Fund share prices will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value, and can increase an investor's risk of loss. All investments are subject to risk, including the risk of loss. About Brandywine Global Brandywine Global offers a broad array of fixed income, equity, alternatives, and asset allocation strategies that seek value across global markets with approximately $63 billion in total assets under management as of March 31, 2025. Founded in 1986 and headquartered in Philadelphia, the firm maintains strategically located offices across the United States, Europe, Australia and Asia. More information about the firm is available at About Franklin Templeton Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton's mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and $1.57 trillion in assets under management as of May 31, 2025. For more information, please visit and follow us on LinkedIn, X and Facebook. Category: Fund Announcement Source: Franklin Resources, Inc. Source: Legg Mason Closed End Funds
