Key Insights
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Nvidia’s data center segment has garnered significant attention lately.
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Investors should definitely consider the potential within the gaming and AI PC markets.
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Market opportunities suggest that this growth trend could persist for an extended period.
Nvidia (NASDAQ:NVDA) has seen its data center business becoming the primary growth driver recently, with a market cap of around $4.46 trillion at present. This growth makes sense, considering the increasing demand for graphics processing units (GPUs) used in AI model training and inference applications.
The revenue from Nvidia’s data center surged from $15 billion in the fiscal year 2023 (ending January 2023) to an estimated $192 billion for the current fiscal year 2026, which wraps up next month. Investors can anticipate substantial revenue growth in this area in the years to come, largely due to strong investments in AI infrastructure.
But, there’s another opportunity that might be flying under the radar for investors. This segment could potentially push Nvidia’s profits to a staggering $350 billion in market value over time, a business that had once been a major part of Nvidia’s strategy before data centers took the spotlight.
Now, let’s delve deeper into this opportunity and see how it could provide solid backing for Nvidia stock.
Nvidia is witnessing notable growth in this market
Believe it or not, just four years ago, gaming was Nvidia’s biggest revenue source. However, it now makes up only 7.5% of total sales in the third quarter of fiscal 2026 (ending October 26). Over the past four quarters, the gaming division contributed nearly $15 billion to the overall revenue, which is impressively $187 billion total over the last twelve months.
Currently, the data center sector is carrying most of Nvidia’s weight. Still, it’s crucial for investors to recognize the gaming sector’s potential. Nvidia essentially holds a dominant position in the discrete GPU market. According to Jon Peddie Research, this segment accounted for 94% of the market share in the second quarter of 2025.
This noteworthy dominance is a big reason why Nvidia’s gaming and AI personal computer (PC) business is on the rise, with gaming revenue up 30% year-over-year last quarter. There’s a strong likelihood that this growth trajectory will continue in the long run. Research predicts that the gaming GPU sector could see an annual growth rate nearing 39% through 2034, potentially hitting a market size of $145 billion.
But there’s more to consider—demand for AI PCs is also predicted to rise at an annual rate of 29% until 2033. These computers will require separate GPUs to manage their AI workloads, which further broadens Nvidia’s potential market. So, the overall opportunity in the gaming and AI PC segments could be even larger than the estimated $145 billion from third-party sources.
This sets the stage for Nvidia to maintain robust growth levels in these markets, which could greatly enhance its market capitalization over time.
Gaming PCs and AI PCs could influence stock values
Three years back, Nvidia executives voiced their expectation for the gaming market to be valued at around $100 billion. Given the current landscape, especially with AI factors at play, I think the 30% growth rate reported for the gaming and AI PC segment is quite sustainable over the long haul.
If Nvidia can keep up this 30% growth rate for the next five years, we could find the gaming and AI PC revenue potentially soaring to $56 billion (based on the last year’s $15 billion). When applying the U.S. technology sector’s average price-to-sales (P/S) ratio of 8.4, it suggests that this sector might be valued at about $468 billion.
When we take the current $15 billion in trailing twelve-month revenue and apply the same ratio, it indicates that the gaming and AI PC segment is already valued at about $126 billion. So, the growth opportunities here might contribute almost $350 billion to Nvidia’s market cap in the next five years—another compelling reason for investors to take a closer look at this AI stock.
Should you consider investing $1,000 in Nvidia now?
Before jumping into Nvidia stock, here are a few points to contemplate:
According to Motley Fool Stock Advisor, their analysts have highlighted what they believe are the best 10 stocks to buy currently—and notably, Nvidia is not on that list. These selections are anticipated to generate significant returns in the coming years.
The results of past investments offer some perspective—if you’d invested $1,000 in Netflix when it was first recommended, that stake would have grown to around $540,587!* Meanwhile, an investment in Nvidia since its recommendation would have reached about $1,118,210!*
What’s encouraging is that Stock Advisor delivers an average return rate of 991%, which is notably higher than the S&P 500’s average of about 195%. It might be worth staying connected to catch the latest top 10 recommendations from Stock Advisor.
This content expresses the author’s views and does not necessarily reflect those of Nasdaq, Inc.
