Nvidia Stock Jumps to Record after Jensen Huang Touts Robotics, the Next Biggest Opportunity Following AI

TMTPOST -- Nvidia Corporation stock jumped 4.3% and finished Wednesday at $154.31. Shares shattered the previous record it set on January 6 after Nvidia CEO Jensen Huang touted robotics, the next biggest opportunity for the company following the leading artificial intelligence (AI).

Credit：Nvidia

The new record close drove Nvidia to the world’s most valuable listed company. With a market value of $3.77 trillion on Wednesday, Nvidia surpassed Microsoft Corporation at $3.66 trillion, reclaiming the top spot that the leading chipmaker ceded to Microsoft earlier this month.

Earlier Wednesday, Huang at Nvidia’s annual shareholder meeting said robotics marks the company’s one of the two biggest market opportunity next to AI, and self-driving vehicles would be the first major commercial application for the technology.

“We have many growth opportunities across our company, with AI and robotics the two largest, representing a multitrillion-dollar growth opportunity,” Huang responded to an attendee at the meeting.

The automotive and robotics business accounted for nearly 1.3% of Nvidia revenue for its first fiscal quarter ended April 27, while the top division data center, which includes AI chips and related parts, contributed 88.7% of the quarterly revenue. Huang believes the robotics business, though relatively small for Nvidia right now, can also benefit from future applications since they require not just data center chips to train the software, but also chips empowering autonomous cars and robotics.

Huang undercored Nvidia’s chip-powered Drive, an end-to-end platform for autonomous driving, and software for self-driving cars, which Mercedes-Benz is using. He also noted Cusoms, the platform built to power world model training and accelerate physical AI development for autonomous vehicles and robots. “We’re working towards a day where there will be billions of robots, hundreds of millions of autonomous vehicles, and hundreds of thousands of robotic factories that can be powered by Nvidia technology,” Huang said.

As of Wednesday, Nvidia stock has rallied 63% from an April low, adding almost $1.5 trillion to its market capitalization. As a positive for bulls, Huang at the shareholder meeting Wednesday reassured investors that AI demand remained strong. He reiterated his view that the computer industry is only at the beginning of a massive AI infrastructure upgrade.

Nvidia’s stock rally was also strengthened by the earnings report late May, which smoothed concerns over the supply chain hurdles and shock from the trade war as the Trump administration is tightening export control on AI chips to China.

Nvidia on May 28 posted revenue of $44.1 billion for its first fiscal quarter, beating analysts expected $43.29 billion. That represented a year-over-year (YoY) increase of 69% in sales, slowing down with a 78% surge three months earlier. On non-GAAP basis, adjusted earnings per share (EPS) shot up 33% YoY to $0.81 after a 71% YoY increase for the preceding quarter, while EPS excluding charge related to H20 chips and tax impact stood at $0.96, still better than estimated $0.93. Adjusted gross margin including H20 charge dropped to 61%, down from 78.9% a year ago. Without H20 charge, the margin was 71.3%, compared with estimates of 71%.

Nvidia said in a statement it incurred a $4.5 billion charge during the April quarter associated with H20 excess inventory and purchase obligations as the demand for H20 diminished under the new requirements for export license. The AI chip giant on April 9 was informed by the U.S. government that a license is required for exports of its H20 products, which were designed primarily for China, into the market.

Nvidia expected revenue to be $4.5 billion, plus or minus 2% for the current quarter. The outlook is roughly in line with Wall Street forecast as the mid-point is slightly below the consensus expectation of $45.5 billion. The company said its sales guidance reflected a loss in H20 revenue of around $8 billion. Adjusted gross margin is projected to be 71.5% to 72.5%, in line with estimated 71.7%.

Loop Capital analyst Ananda Baruah on Wednesday raised his price target for Nvidia stock to $250, the highest of Wall Street analysts tracked by Yahoo Finance. The new price target suggests Nvidia's market value could surge to $6 trillion, up 59% from its current level. "While it may seem fantastic that NVDA fundamentals can continue to amplify from current levels, we remind folks that NVDA remains essentially a monopoly for critical tech, and that it has pricing (and margin) power," Baruah wrote in a note, adding that Loop Capital analysts see the market for AI chips growing to $2 trillion in 2028.