What's next for Nvidia?

Now consider that there is yet another segment of Nvidia's business with the potential to take a similar growth trajectory. Nvidia's automotive and robotics segment has more than doubled its revenues over the last two years. While its automotive segment still contributes only a minor portion of total sales, self-driving technology is advancing and numerous automakers are already Nvidia customers.
Several Chinese electric vehicle (EV) makers, autonomous driving technology companies, and global automakers are using Nvidia's Drive platforms. In its latest earnings report, Nvidia also noted that "an array of partners are using Nvidia generative AI technologies to transform in-vehicle experiences."
Most recently, U.S.-based EV maker Rivian Automotive said it would be using Nvidia's Drive Orin processors to increase computing power and improve the performance of its R1 platform vehicles.

Don't ignore valuation
While the potential remains immense for Nvidia to grow sales and earnings, investors shouldn't ignore the fact that some of that expected growth is already baked into the company's current valuation. Some investors believe the stock has already risen beyond a reasonable valuation and is due for a major correction.
While earnings are up by more than 600% so far this year, the stock followed a similar trajectory. With a forward price-to-earnings ratio of about 50 and a price-to-sales ratio of nearly 30 based on this year's projected revenue, Nvidia will need to deliver significantly more growth before the stock looks like a bargain again.