Nvidia is trying to broaden investor enthusiasm beyond its core artificial-intelligence chip business by highlighting opportunities in robotics and autonomous driving.
So far, the market response has been restrained.
Nvidia shares opened higher on Tuesday and at one point surged around 2%, but the rally quickly faded.
By mid-session, the stock was up just 0.13%, trading near $188, underscoring investor caution despite a flurry of announcements from the company at the Consumer Electronics Show in Las Vegas.
CES spotlight on “physical AI”
Nvidia CEO Jensen Huang devoted a significant portion of his CES presentation on Monday to what he described as “physical AI” — artificial intelligence systems designed to operate in the real world rather than solely in digital environments.
The company showcased a range of programming libraries and software tools aimed at robotics, autonomous vehicles and other physical systems that can perceive, reason and act.
Nvidia framed robotics as a major growth opportunity and unveiled several new AI models intended to accelerate robot development.
According to the company, these models are designed to help machines learn multiple tasks more quickly, lowering barriers to adoption and expanding potential use cases.
“The ChatGPT moment for robotics is here. Breakthroughs in physical AI—models that understand the real world, reason and plan actions—are unlocking entirely new applications,” Huang said in a statement.
The company also outlined a deeper push into autonomous driving, positioning its software and hardware as a foundational platform for automakers and mobility providers.
As part of that strategy, Nvidia said Mercedes-Benz will be the first automaker to use its software to power new driver-assistance features.
Vehicles incorporating the technology are expected to roll out under the Mercedes-Benz CLA brand in the US in the coming months.
Wedbush analyst Dan Ives described the opportunity as transformative. “We believe the robotics and autonomous technology market represents an incremental market opportunity that Nvidia can tap into which speaks to our view that this company will exceed $5 trillion market cap in the near-term and ultimately could be a $6 trillion market cap,” Ives wrote in a research note.
Investors remain focused on AI chips
Despite the bullish rhetoric, investors have yet to assign significant value to Nvidia’s robotics and autonomous driving ambitions.
Market attention remains firmly centred on the company’s AI chips, which continue to drive the bulk of its revenue and valuation.
There was some reassurance on that front. Huang said Nvidia’s next-generation Vera Rubin processors are already in “full production,” ahead of their anticipated launch in the second half of the year.
The company said Rubin will deliver a tenfold reduction in inference costs compared with its current-generation Blackwell chips, a claim that reinforces Nvidia’s leadership in AI hardware.
Growing competition and valuation concerns
The broader narrative appears to be losing some momentum. Nvidia shares are down about 8% since hitting a record high on Oct. 29, underperforming the S&P 500.
The pullback has erased roughly $460 billion in market value in recent months, even as the stock remains up nearly 1,200% over the past three years.
The recent weakness reflects rising investor unease over the sustainability of AI spending and Nvidia’s dominant position.
The company faces intensifying competition from rivals such as Advanced Micro Devices, as well as from major customers including Alphabet and Amazon, which are developing their own AI capabilities.
Wall Street has also grown more cautious about Nvidia’s investments in some customers, raising questions about whether those relationships are supporting near-term demand at the expense of longer-term clarity.
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