Nvidia Already is the GPU Giant. Now It's Aiming to Dominate in a New $200 Billion Market.

Nvidia (NASDAQ: NVDA) has built much of its success thanks to one key product: the graphics processing unit (GPU). This is the chip driving key AI tasks such as the training and inference of large language models, and while other companies sell GPUs and similar chips, Nvidia's have consistently been the fastest and most efficient. As a result, customers have rushed to get in on the company's GPUs and latest updates -- and this has led to enormous earnings growth.

Note that I say "earnings" and not just "revenue" growth. Nvidia not only has seen revenue explode higher, but it's also translated this into incredible levels of profit. In the latest quarter, revenue climbed 85% to $81 billion, and net income on a GAAP basis advanced 211% to $58 billion. And this period isn't an exception: Nvidia's been delivering this sort of growth quarter after quarter since the start of the AI boom. All of this has helped the stock gain more than 1,200% over the past five years.

So it's fair to say that Nvidia is the world's GPU giant. But the company isn't finished with its quest for leadership. Now, the tech giant is aiming to dominate a new $200 billion market. Let's check out the details and consider what it means for the company -- and investors.

Image source: Getty Images.

Nvidia's strength in GPUs

As mentioned, Nvidia's strength in GPUs, and therefore the powering of AI tasks, has helped it rise to the top of the AI chip market. Nvidia's GPUs originally serviced the gaming market -- and they still do -- but about 10 years ago, the company took note of the AI opportunity and decided to focus on it. This was a wise move, considering Nvidia's earnings performance in recent years.

But Nvidia didn't stop with the GPU. The company built out a complete portfolio of AI products and services, creating an AI empire. This includes elements such as enterprise software and networking tools. One particular product, however, wasn't Nvidia's specialty -- and that was the central processing unit (CPU), or the main processor in computers of all sorts. For top CPUs, customers have turned to Intel, a company that's been a longtime leader in that market, as well as Advanced Micro Devices.

CPUs weren't spoken of much in the first phases of the AI boom, as the standout product powering processes was the GPU. In recent times, though, the CPU has emerged as a tool that may be key in the next stage of AI growth: the agentic AI era. Nvidia offers a CPU as part of its Blackwell system -- but this isn't a stand-alone product.

Vera Rubin: the key to a new market

However, Nvidia's upcoming Vera Rubin platform does offer a CPU stand-alone, and Nvidia expects this to unlock a $200 billion opportunity. In fact, Nvidia already predicts $20 billion in stand-alone CPU sales this year -- and this is with Rubin shipments beginning in the third quarter.

This is "setting us up to become the world's leading CPU supplier," chief financial officer Colette Kress said during Nvidia's recent earnings call.

Why is the CPU suddenly in the spotlight? Because it's a great solution for agentic AI, offering just enough compute power along with higher energy efficiency than a GPU. Agentic AI is seen as the next AI growth driver, as it's the actual application of the technology in the real world, with AI thinking and taking actions to solve problems. So it's crucial for Nvidia to lead here if it aims to stay on top in the AI market.

Now let's get back to our question: What does this mean for Nvidia and its shareholders? This move may not seem like a big deal, but it's actually a game-changing step for the tech giant. Becoming the global leader in both GPUs and CPUs could help revenue skyrocket in the quarters to come -- and at the same time broaden Nvidia's new revenue opportunities beyond AI.

All of this is fantastic news for shareholders, particularly those who may have worried about Nvidia's focus on GPUs and AI. A leading position in CPUs could greatly reduce risk. All of this makes Nvidia a top stock to own as it progresses in this $200 billion market.

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