Nvidia (NVDA 1.45%) has wowed investors quarter after quarter with explosive revenue growth. This is thanks to the company's expertise in artificial intelligence (AI), a market that analysts say may soon be worth more than $2 trillion. Nvidia's initial strength was in the graphics processing unit (GPU), or the AI chip powering key AI tasks, but the company worked to expand that, including a variety of other related products in its portfolio.
Today, AI customers turn to Nvidia for a complete offering, from chips to networking tools and software. And this has translated into yet another quarter and year of tremendous growth. In the fourth quarter and fiscal 2026 full year, Nvidia delivered double-digit revenue gains and strong profitability on sales, with gross margin reaching into the mid-70% level.
Even though business is booming, is the following one number Nvidia's biggest risk?
Image source: Getty Images.
From gaming to AI
Before we consider this, let's take a look at how Nvidia's business has evolved since its early days. The company has been around for more than 30 years -- one thing that hasn't changed is Nvidia's strength in designing GPUs. But what has changed is the company's focus. For years, Nvidia's biggest business was the video gaming market, but as the AI boom developed, the company made major moves to address it.
Nvidia designed its chips specifically to meet the needs of AI customers, and it did this before AI truly took off. It was a risky bet, but as we can see now, it was the right move. Thanks to that decision, Nvidia's revenue has soared to new heights. And stock performance has followed, with the shares climbing 1,300% over the past five years.
NASDAQ: NVDA
Key Data Points
91% of revenue
But this has also led Nvidia to a position that some may see as risky. The company now generates 91% of its revenue from the data center business, or AI data center customers. This makes Nvidia highly dependent on AI for growth. Is that one number Nvidia's biggest risk?
We all know it's not a good idea to put all of our eggs in one basket. But it's important to note a couple of things here. First, Nvidia hasn't abandoned other sources of revenue, such as gaming and professional visualization. And sectors such as automotive, robotics, and eventually telecom represent other areas of AI growth beyond data centers.
Second, it's unlikely that AI will disappear -- even if spending ebbs and flows at certain points. Companies have invested in the technology and are already applying it to real-world situations, and demand remains high.
It's also important to note that Nvidia, through its shift into AI, has shown its ability to adapt and lead in a new industry. So I wouldn't worry too much about Nvidia's dependence on AI today and instead would be confident about this player's long-term potential.
