Nvidia (NVDA 0.04%) has pretty much ruled the world of artificial intelligence (AI) data centers in recent times, and this is thanks to the power of its chips. The company's graphics processing units (GPUs) are the key tools needed for both the development and use of AI -- they fuel the training of models as well as the inferencing phase that involves the model actually thinking through a problem and solving it.
All of this has driven major revenue growth at the company, and Nvidia even said recently that from the last quarter of this fiscal year and through the four quarters of the coming year, it's expecting half a trillion dollars of revenue so far. This is due to orders for its current Blackwell system and the upcoming Rubin platform.
This news is fantastic, and Nvidia is proving that it will continue its data center dominance. Now, in addition to this, Nvidia just made another move that should be a game-changer -- allowing the company to expand its strengths into something that's central to our daily lives. Let's check it out.
Nvidia's record revenue
As mentioned, Nvidia already has proven itself in the field of AI -- and this has led to soaring revenue that's reached record levels. For example, in the latest fiscal year, total revenue topped $130 billion, up from about $27 billion just two years ago. Customers have scooped up GPUs for data centers, and this should continue as the data center ramp-up maintains momentum.
Though Nvidia has stood out with the market's top-performing GPUs, other players such as Advanced Micro Devices and even Nvidia customers like Amazon offer their own AI chips -- so a customer might use Nvidia GPUs but also may buy chips from these and other providers. Since Nvidia chips are also the priciest, some investors have worried that Nvidia eventually may lose some market share. I'm not convinced that will happen considering the company's commitment to innovation, but this still represents a risk.
Recently, though, Nvidia made a move that could make the company central to something used throughout the world on a daily basis: telecommunications. Nvidia did this by partnering with telecom powerhouse Nokia (NOK 3.09%), and this agreement offers the chip designer access to a $3 trillion industry.
NASDAQ: NVDA
Key Data Points
A new Nvidia product
Nvidia just announced a new product, the Nvidia Aerial Radio Network Computer, or ARC -- it's a programmable computer that can communicate wirelessly and process AI. Nokia, transitioning to 6G technology, will use ARC as its base station, or central point for wireless communications. The idea is to improve the speed and quality of cellphone communications, and Nvidia may be on its way to playing a central role in this.
This deal could be a game changer for Nvidia because it expands the presence of the chip designer well beyond the area of data centers and into a trillion-dollar industry that's widely used and relied upon. By making itself a key driver of telecom technology, Nvidia enters yet another huge growth market -- and ensures that customers will depend on its innovations in this field.
What does this mean for investors?
So, what does this mean for you as an investor? Nvidia's latest move reinforces that this company has what it takes to generate revenue growth and stock performance well into the future -- and not just through GPUs for data centers. The tech giant could become a dominant player in the world of telecommunications thanks to this partnership with Nokia. This broadens Nvidia's revenue opportunity -- and in an industry of worldwide importance.
All of this means that Nvidia's future growth won't depend only on selling GPUs to data centers -- and that the company's technology and innovation already is leading to additional and significant new revenue opportunities. This makes the tech giant an excellent buy today and one to hold onto for the long term.
