Forget GPUs. Nvidia's Next AI Gold Mine Could Be Even Bigger.
Forget GPUs. Nvidia's Next AI Gold Mine Could Be Even Bigger..
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Nvidia (NVDA) has already become the biggest winner of the artificial intelligence (AI) boom, but Wall Street believes another growth opportunity may just be getting started. Wedbush Securities recently argued that Nvidia's new Vera CPU platform could expand the company's total addressable market (TAM) well beyond graphics processors, opening the door to billions of dollars in additional revenue.
NVDA stock has cooled after its massive rally. Shares are up roughly 28% over the past year but have gained only about 13% so far in 2026. Investors remain cautious because of export restrictions on China, growing competition, and profit-taking following last year's AI surge.
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Even so, Nvidia continues to outperform financially. The company easily beat Wall Street's expectations in its latest quarter on both revenue and earnings. Combined with a reasonable valuation and several new growth drivers, the recent slowdown in NVDA stock may be due to higher expectations rather than weaker fundamentals.
Nvidia dominates the AI accelerator market through its GPUs, but management wants to sell much more than graphics chips. During the company's latest product presentation, CEO Jensen Huang introduced the Vera CPU, a processor designed specifically for AI workloads and agentic AI systems.
Wedbush believes this move could significantly increase Nvidia's total addressable market. Instead of competing only in AI accelerators, Nvidia can now target traditional server CPUs, networking infrastructure, and complete AI computing platforms.
Management says Vera delivers roughly 1.8 times the performance of comparable x86 processors while working alongside Nvidia's AI chips. Reports also suggest Nvidia has begun offering the new processors to cloud customers, including some in China where regulations allow.
If adoption accelerates, the company could capture spending that previously went to companies such as Intel (INTC) and AMD (AMD). That would create another meaningful growth engine on top of its already dominant GPU business.
Nvidia's latest quarterly results show that AI demand remains exceptionally strong. For the first quarter of fiscal 2027, revenue jumped 85% year-over-year (YOY) to $81.6 billion, easily beating analyst expectations. Data Center revenue climbed 92% YOY to $75.2 billion, highlighting that AI infrastructure remains the company's primary growth engine.
The company also exceeded earnings estimates. Net income surged 211% to $58.3 billion, while EPS reached $2.39. Nvidia generated approximately $48.6 billion in free cash flow during the quarter and finished with roughly $13.2 billion in cash.
Management also issued strong guidance, forecasting approximately $91 billion in Q2 revenue despite assuming no China data-center sales because of export restrictions. That outlook suggests AI spending remains healthy even without contributions from one of the world's largest technology markets.
Despite its enormous rally over the past two years, Nvidia's valuation is not as demanding as many investors assume.
NVDA stock currently trades at roughly 23 times forward earnings, which is below the broader tech sector average despite Nvidia delivering much faster earnings growth. Its PEG ratio of 0.45 times also suggests the valuation remains attractive relative to its expected earnings expansion.
Wall Street expects Nvidia to generate well over $300 billion in fiscal 2027 revenue, while consensus earnings estimates have moved to $8.80 per share. If the company successfully expands into CPUs alongside its dominant GPU franchise, those forecasts could continue moving higher.
Analysts remain overwhelmingly bullish on Nvidia's long-term outlook. Wedbush believes the Vera CPU platform gives Nvidia another opportunity to expand its TAM beyond GPUs, strengthening its competitive position across AI infrastructure.
Overall, Wall Street's average price target sits at $302.55, implying meaningful potential upside of 43% from current levels. While concerns around China and increased competition are not to be ignored, experts seem to be united in their view of NVDA stock. Nvidia appears to be poised for its next round of long-term growth as a leader in AI hardware, software, networks, and now CPUs.
