Nvidia Stock May Rise As Its Stealth AI Cloud Rivals Big Customers'

Core Insights - Nvidia is focusing on enhancing its partnerships with technology end-users through product announcements at CES, which include advancements in robotics, automotive, and gaming sectors [5][6][3] - The company is exploring a strategy to compete with major cloud service providers by developing its own AI cloud, which could significantly impact its growth trajectory [8][9][10] Nvidia's CES Product Announcements - Robotics: Nvidia introduced "physical AI" simulation tools to aid in robot training, targeting a $38 billion market opportunity in the coming decades [6][3] - Automotive: A new deal with Toyota for driver-assistance chips and software could lead to a 25% increase in automotive revenue, projecting $5 billion for the next fiscal year [6][3] - Gaming: The launch of RTX 50-series chips aims to enhance gaming graphics and performance, with gaming sales currently accounting for under 10% of total revenue [6][3] - AI Research: Project DIGITS, a desktop AI supercomputer starting at $3,000, is designed to facilitate AI model development for researchers [6][3] AI Cloud Strategy - Nvidia's potential move into cloud computing could allow it to lease data center capacity for AI processing, competing with existing cloud service customers [8][9] - The AI cloud market is projected to grow at a 100% compound annual rate, from $4 billion last year to $32 billion by 2027 [11] - Analysts suggest that Nvidia's cloud strategy could enhance profitability by reducing reliance on third-party cloud services [11][12] Market Outlook - Nvidia's stock is projected to rise by 18.5% to an average target of $135, indicating positive market sentiment [13] - The company's market capitalization could reach $5 trillion by mid-2026, driven by technological advancements and expansion into new markets [14]