Something Big Just Happened in AI, Says Jensen Huang. Here's What it Means for Nvidia.

When most people think of artificial intelligence (AI), they may immediately think of Nvidia (NASDAQ: NVDA). The company has emerged as the player driving this industry, and that's thanks to the strength of its graphics processing units (GPUs). These are the AI chips that power some of the most essential of AI tasks, from training to inference.

All of this has led to outstanding earnings growth for the company, as it demonstrated once again in the recent quarter. Revenue exploded higher in the double digits to reach record levels in that period and for the full year.

That's positive, but some investors have wondered about what's next for Nvidia along the AI path. The concern is that the biggest revenue opportunity may have been in the past, as companies rushed to Nvidia to train their models.

Nvidia chief Jensen Huang just offered us clues about the future as he noted something big that just happened in the AI world. Let's check out what this means for the AI leader.

Image source: Getty Images.

The leading AI chip company

We'll start out with a quick summary of what's unfolded so far along Nvidia's AI path. As mentioned, Nvidia is the leading AI chip company worldwide, thanks to its early market presence and focus on innovation. Nvidia updates its chips annually, making it very difficult for a rival to step ahead.

In the earliest days of AI, companies turned to Nvidia for GPUs to train their large language models -- and they still do. But Nvidia hasn't limited itself to AI chips. The company has since built out an entire ecosystem of products, including networking tools, enterprise software, and more. All of this makes Nvidia a true AI expert with visibility on all aspects of the industry, and it has greatly expanded the revenue opportunity, too.

Nvidia's stock price and earnings have roared higher in recent years due to this prominent role in the industry. And this continued through the most recent quarter. Looking forward, Nvidia forecasts revenue of $78 billion, representing a 77% increase from the year-earlier period.

A key turning point

Now, let's consider what's next for the top chip company. Jensen Huang said that he and others in the industry noticed an inflection point in AI about six months ago -- but it's just become generally apparent over the past couple of months. And this is the emergence of agentic AI.

"The agents are super smart," Huang said. "They are solving real problems."

This signals that right now, AI isn't just in training; instead, this technology is being used in many ways, and we're in the early stages of this phase. There's reason to be optimistic that this will drive more growth for Nvidia as GPUs power these systems as they go through the problem-solving process.

Huang went a step further to offer us an idea of what lies ahead beyond this stage -- and that will be physical AI. This involves using the systems, such as AI agents, that have been built and bringing them into areas such as robotics. Huang calls this a "giant opportunity."

All of this is important to note, as it shows us that much growth may lie ahead for Nvidia, and the company's role in the industry doesn't stop with the training of models.

This may not result in explosive stock performance right away. Investors may focus on the general economy or stock market, and any headwinds there could weigh on demand for growth stocks. But if you believe in the general AI growth story -- and so far, the signs we've seen from the industry are favorable -- there's reason to be bullish on Nvidia over the long term. And that makes the stock a great one to hold onto throughout this AI revolution.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.