NVIDIA (NASDAQ:NVDA) has long dominated the graphics processing unit (GPU) market. GPUs power the computing technology needed to play video games, and NVIDIA's gaming business generated revenue with an 11% compound annual growth rate (CAGR) over the past three years.

But NVIDIA is just getting started. The company could deliver significant gains for investors as it expands the application of its technology beyond gaming. Let's take a deeper dive into NVIDIA and what it does to get a better sense of whether it could be a millionaire-maker stock.

More than gaming

NVIDIA still generates the largest share of its revenue from gaming, but it's no longer just a gaming company. It's applied its expertise in computing power to data centers, a key component of the red-hot cloud computing space, and to the market for artificial intelligence (AI).

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Image source: Getty Images.

Various industries, such as automotive, use NVIDIA's AI capabilities, particularly in the realm of self-driving cars. NVIDIA recently announced a partnership with Daimler (OTC:DMLR.Y) subsidiary Mercedes-Benz to deliver self-driving and other technological advances to the Mercedes-Benz fleet by 2024. NVIDIA's automotive revenue has grown at a 22% CAGR over the last five fiscal years.

NVIDIA also possesses a thriving data center business, which provides GPUs and other components to data centers, the locations where technology companies house computing and networking equipment for cloud computing and other uses. NVIDIA's data center offerings are employed by every major cloud provider, including Amazon's AWS and Microsoft's Azure.

In NVIDIA's first quarter of fiscal 2021 (which ended April 26), its data center division reached the $1 billion mark for the first time, achieving a record $1.1 billion in revenue. The result helped NVIDIA grow total quarterly revenue 39% year over year to $3.1 billion.

The company added to its data center strength in April by completing the acquisition of Mellanox Technologies, a supplier of components used to improve data center efficiency. The acquisition was immediately accretive to free cash flow as well as to non-GAAP (generally accepted accounting principles) gross margins and earnings per share.

Future growth potential

Data center spending worldwide grew from $170 billion in 2016 to $212 billion last year. The market is forecasted to decline to $191 billion in 2020 due to the novel coronavirus pandemic, but expected to return to growth in the future and even accelerate in areas such as cloud computing, according to research firm Gartner.

This bodes well for NVIDIA's future. The company's AI capabilities complement the demand for automation in data centers. As data centers evolve into hyperscale data centers, which are larger and more intricate, the need to deliver security and efficiency at scale leads to leveraging AI technology.

NVIDIA's strategies are working. In fact, it's a challenge to find a downside. The company achieved record gross margin of 65.1% in the first quarter, up from 58.4% the previous year. NVIDIA's Q1 balance sheet is strong with total assets of $23.3 billion, more than double its total liabilities of $10.2 billion. It has cash and equivalents of $16.4 billion, up from $10.9 billion in the fourth quarter.

It's committed to funding its dividend, which the company can easily do given a low payout ratio of 12%. The company also ended the quarter with a free cash flow of $754 million, up from the previous year's $592 million.

NVIDIA even provided second-quarter guidance at a time when many companies withdrew guidance due to the economic uncertainty created by the pandemic. Second-quarter revenue is expected to reach $3.65 billion, an increase over last year's $2.6 billion.

The bottom line

NVIDIA's stock hovers near its 52-week high of $385.70 a share at the time of this writing, more than double its per-share low of $147.39. So if you didn't already invest, did you miss the boat?

Not yet. NVIDIA still possesses plenty of upside potential ahead. Consider that the cloud computing market alone is forecasted to grow at a 12.5% CAGR from 2018 to 2022. Even further, the use of AI rose 37% in 2019, up from 10% in 2015 and triple the deployment in 2018, with no signs of slowing down.

NVIDIA's technology is instrumental to the most advanced computing in the world today, which could enhance the possibility of big gains for NVIDIA stock and outsized returns for investors.