Nvidia's CPU Ambitions Could Be Its Next Growth Driver

Nvidia, the company behind the popular graphics processing units (GPUs), has built an artificial intelligence empire thanks to its strength in the GPU market. Researchers and companies use these powerful chips for key tasks such as AI model training and inferencing.

The company's earnings have soared every quarter over the past few years, with investors piling into the stock as it climbed 400% over three years. However, this year, Nvidia's stock has advanced at a more moderate pace, heading for a 20% annual gain.

While the GPU market continues to be a key driver of Nvidia's growth, the company's progress in CPUs could supercharge its performance and lead to the next leg up in stock value. The Vera Rubin platform, released by Nvidia, is the first-ever stand-alone CPU developed by the company, aiming to address a $200 billion market opportunity.

Nvidia expects to generate $20 billion in CPU sales this year, considering that the Rubin platform has only recently started shipping and there are still several months left in the year. The company's ambitions for CPUs are driven by the growing demand for agentic AI, which requires powerful chips like the CPU to power its operations.