In the face of a faltering economy, Nvidia stock (NASDAQ:NVDA) has dropped 64% from its all-time high.
Nvidia is one of the most popular inventive semiconductor businesses in the world. But, in addition to producing powerful computer chips, it is increasing its software footprint due to its dominant position in artificial intelligence (AI) research.
Gaming, formerly the company’s main revenue category, has slowed substantially this year. Soaring inflation has caused customers to cut down on big-ticket purchases.
Nvidia Stock: Nvidia will drive the future.
Since 2014, Nvidia has maintained cooperation with China-based electric car maker Nio (NIO -15.70%), although the scope is rapidly expanding. The two firms previously partnered on in-car entertainment systems, but Nio now depends on Nvidia for sophisticated chip technology and software to provide autonomous self-driving capabilities.
Nio’s flagship models are powered by the Nvidia DRIVE platform and operate on the Adam supercomputer. Adam can do 1,000 trillion actions per second, enabling autonomous driving on expressways and in metropolitan areas and self-parking.
However, Nio is just one of at least 35 automobile firms that have used Nvidia’s technology so far, and the chipmaker’s sales pipeline for the DRIVE platform has already surpassed $11 billion. Notably, top-tier automakers such as Daimler’s Mercedes Benz will begin putting out Nvidia-powered autonomous cars as early as 2024.
While it will be a very profitable market in the future, Nvidia is a $306 billion corporation, so the automotive element is currently rather minor. The company’s data center business seems to be the most promising in the short term. Revenue in that sector increased by 61% in the second quarter of fiscal 2023 (ending July 31), making up for the 33% drop in the gaming business.
Nvidia is leading the charge in transforming data centers from a place to store information to a training ground for artificial intelligence and machine learning, allowing businesses to get more useful insights from their data than ever.
Why is Nvidia stock a good purchase on the dip?
Nvidia’s gaming business may be struggling right now, but it has a bright future. Aside from the fact that consumer spending will ultimately rebound, the business continues to produce new products, such as its cloud-based gaming platform, GeForce Now. It has over 20 million customers who can immediately watch their favorite titles online without needing to buy a disc or download them. It also removes the need for patches and updates, making the experience more seamless and nvidia stock (NASDAQ:NVDA) more appealing.
The data center industry is also expected to grow as more businesses use cloud computing technologies to move their activities online. Furthermore, according to McKinsey & Company, by 2030, up to 70% of all enterprises globally might use artificial intelligence in some capacity, an area in which Nvidia is currently a leader.
However, the growing long-term opportunity may be in autonomous driving, a sector that might be worth $2.1 trillion by 2030. Nvidia is a future firm, and investors can purchase Nvidia stock (NASDAQ:NVDA) at a considerable discount to their all-time high.
Featured Image – Megapixl © Andreistanescu
Author Shariq Khan 
