1 Important Reason to Purchase Nvidia Stock on a Dip

Currently Nvidia's smallest commercial division, the automobile industry may soon experience rapid development.

This year's stock market sell-off has been violent and indiscriminate, wreaking havoc on virtually every business. But after ranking among the top areas to invest during the epidemic, the technology industry is now particularly heavily impacted.

That implies that, occasionally, excellent opportunities are offered at a bargain. One of the top semiconductor businesses in the world, Nvidia (NVDA -4.20%) is quickly developing into a dominant platform computing powerhouse as a result of its investments in cutting-edge software tools.
While there are many reasons to hold it, nvidia share price is down 58 percent from its peak—here is one that is occasionally disregarded.

Driving autonomous vehicles

Nvidia is well known for its industry-leading graphics processors, which are frequently utilized in data center and gaming applications. In the first three months of the company's fiscal 2023, these two divisions generated 88 percent of the business's revenue (ended May 1).

However, the smallest market for Nvidia, automotive and robotics, is likely the most fascinating. Even while it only accounts for 1.8 percent of the company's total income over the past 12 months, it has the potential to significantly grow.
a revenue graph for Nvidia's automotive division.

The Nvidia DRIVE platform, an all-inclusive solution for automakers looking to create autonomous (self-driving) vehicles, is the market leader in this niche. Nvidia not only offers the hardware but also the software, which includes cutting-edge tools like artificial intelligence for training autonomous models.

In order to build physically accurate simulations, Nvidia DRIVE Sim makes use of the company's Omniverse platform, a 3D rendering engine that enables developers to construct accurate real-life scenarios in a virtual world. The largest organizations in the world utilize Omniverse to generate digital twins of their physical assets that are millimeter-accurate, making it the ideal platform for road mapping for self-driving applications.

Nvidia's share price will rise. This is a huge profit opportunity.

Despite barely earning $550 million in the past year, Nvidia's automotive and robotics division has a $11 billion sales pipeline. Over the following six years, this is anticipated to turn into income, but if manufacturers start releasing the technology, the ramp-up might be quick. 

One of the first automakers to market autonomous vehicles created with Nvidia DRIVE is Mercedes-Benz (DMLR.Y 0.00 percent). It is one of 35 brands using the platform, and it anticipates starting deliveries in 2024. Others include Tata Motors' (TTM 1.74%) Jaguar and Land Rover as well as the electric vehicle manufacturers Lucid Group (LCID -0.93 percent) and Nio (NIO -1.66 percent).

The market for autonomous vehicles is anticipated to expand between now and 2030 at a compound annual growth rate of 40%, bringing Nvidia's opportunity to over $2.1 trillion yearly by that time. Therefore, even if the automotive market is currently Nvidia's smallest, it might drastically alter over the next few years.

Investors don't need to wait though; according to experts, Nvidia will generate $33.7 billion in total sales in fiscal 2023 thanks to its dominance in the gaming and data center industries. Nvidia is a rapidly expanding, extremely lucrative business prospect, and once its automotive section ramps up more, it may offer big benefits to persistent investors.

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