Nvidia's (NVDA 16.40%) share prices are down by over 48% since hitting their peak in November 2021. In 2021, this full-stack technology company's stock benefited dramatically from increasing digitization in the enterprise and consumer segments.

The year 2022 has proved challenging for this semiconductor company. Nvidia is suffering from weakness in the gaming and crypto business as consumers prefer to delay discretionary spending in the current recessionary environment. The company's preliminary financial results for the second quarter of fiscal 2023 (ended July 31, 2022) have missed both the company's guidance as well as the analyst consensus estimates. Despite being mainly due to tougher prior-year comps, the slowing top-line growth has negatively affected investor sentiment.

However, demand in the data center and automobile segments has remained strong. Considering that the stock has corrected significantly from its highs, investors may want to assess this stock now.

The data center is a rapidly growing market

As per preliminary financial results, in the second quarter, Nvidia's data center revenue was up 61% year over year to $3.81 billion. The data center business now accounts for nearly 56% of the company's total revenue. The company offers a broad suite of data center-focused hardware such as GPUs, CPUs, and DPUs (data processing units). Additionally, Nvidia also offers a CUDA toolkit, which is an environment for developers to easily build GPU-accelerated applications as well as GPU-optimized software libraries, targeting the needs of the data center industry.

Nvidia's data center offerings are being used in supercomputing centers, enterprise computing data centers, hyperscalers, and cloud computing. Thanks to its broad catalog of product and software offerings catering to all the needs of the data center, every major cloud provider such as Amazon, Microsoft, and Alphabet is now using the company's chips.

The use of the company's technologically superior and cost-efficient data center chips is expected to become even more relevant in the current recessionary environment. Hence, being a leader in accelerated computing, Nvidia is well poised to benefit from the rapid expansion in the global data center accelerator market (expected to be worth $75.2 billion by 2027).

Autonomous driving could be a major growth driver

Nvidia has introduced a range of hardware, software, and infrastructure solutions to target the autonomous driving opportunity. Nvidia DRIVE Orin system-on-a-chip (SoC) is a very powerful and intelligent chip capable of processing huge amounts of data (feeds from interior and exterior cameras, RADARS, ultrasonic sensors, and LiDAR or light detection and ranging sonar) in a very short time. It acts like the brain of the computer -- a must for autonomous driving. More than 25 vehicle manufacturers have opted for this SoC, which is currently in production. The company also offers the Nvidia DRIVE Hyperion integrated hardware and software platform for automakers to develop, test, and validate customized autonomous driving solutions. Nvidia estimates its design wins in the automotive industry to be worth $11 billion for the next six years.

Is Nvidia a buy now?

Nvidia's recently published second-quarter results are quite disappointing. While this has affected the analyst and investor sentiment for the stock, the company's fundamental story remains strong. Nvidia is a company with a significant technological advantage and a robust balance sheet (cash balance of $20.34 billion and total debt of $11.85 billion at the end of the first quarter). The company plans to repurchase shares worth $15 billion by the end of December 2023, thereby returning significant value to shareholders.

Nvidia is currently valued at 177 times forward earnings. While this valuation seems lofty, it is significantly lower than the levels the company traded at in 2021.

There is no question that Nvidia is a risky stock -- especially with the slowdown in the gaming industry and crypto price crash, which may result in a prolonged reduction in GPU demand as well as GPU prices.

However, despite the risks, Nvidia remains an amazing business. With prices somewhat corrected, a small investment in this stock may prove to be a good decision for retail investors.