Nvidia CEO flags $200B CPU opportunity as AI platform expands

Jensen Huang's $200 billion CPU market estimate signals Nvidia's transformation from GPU supplier to full-stack AI computing platform.

Nvidia Chief Executive Jensen Huang said the company's Vera CPU architecture opens a $200 billion addressable market, broadening its AI opportunity beyond the graphics processors that have driven its five-trillion-dollar valuation.

"The Vera CPU gives Nvidia access to a new addressable market worth approximately $200 billion," Huang said during the company's earnings call last week, adding that the estimate includes China. The central processing unit push comes as agentic AI broadens computing demand beyond the traditional GPUs used for training large language models.

Nvidia has beaten analyst expectations on revenue and operating income for 14 consecutive quarters, according to FactSet data. First-quarter revenue grew 85 percent year-over-year, and the company guided for even faster growth in the current quarter. Despite the streak, shares have remained under pressure, trading at a forward price-to-earnings ratio of about 22 times — far below Advanced Micro Devices at roughly 47 times and Intel at about 95 times.

The CPU expansion positions Nvidia to compete more directly with Intel and AMD in the data center processor market, a segment valued at roughly $200 billion annually. Huang's comments suggest Nvidia is no longer content to dominate just the GPU-accelerated computing layer but aims to supply the full stack: CPUs, networking, software, and infrastructure.

The China Question Remains Unresolved

China continues to be one of the biggest unknowns for Nvidia investors. The company has received US government licenses allowing sales of its H200 chips into the country under certain restrictions, but Chinese authorities have not yet approved broad deployment as Beijing prioritizes domestic semiconductor suppliers.

"H200 has been licensed to ship to China. It would be terrific to be able to serve that market," Huang said over the weekend in Taipei. "The Chinese market is very important. It's very large, of course."

Reuters reported last week that the United States approved about 10 Chinese firms to purchase Nvidia's H200 chips, though no deliveries have occurred so far. Huang acknowledged recently that Nvidia has "largely conceded" portions of the Chinese market to Huawei as domestic alternatives gain support from Beijing.

Valuation Gap Persists Despite Earnings Dominance

The average Wall Street price target on Nvidia has climbed to roughly $294, according to FactSet, while about 93 percent of analysts covering the stock maintain Buy-equivalent ratings. Several major firms — including Baird, Goldman Sachs, and Morgan Stanley — raised their price targets following the earnings release.

Nvidia's market valuation now exceeds $5.2 trillion, making it the largest publicly traded company in the world. The stock accounts for roughly 20 percent of the S&P 500's 9 percent year-to-date gain, according to data compiled by Bloomberg. Yet only 57 percent of the 503 stocks in the index are in positive territory this year, highlighting how concentrated the rally has become.

For investors, the key question is whether Nvidia's valuation adequately reflects its expanding addressable market. At 22 times forward earnings, the stock trades at a discount to its AI peers despite holding a dominant position in AI accelerators and now pursuing a CPU market worth $200 billion. If the Vera architecture gains traction with hyperscale data center customers, the platform narrative could justify a re-rating. If China blocks H200 deployment or AMD and Intel mount a credible CPU counterattack, the multiple could compress further.

This article is for informational purposes only and does not constitute investment advice.