Nvidia (NASDAQ: NVDA) stock has soared 258% over the past 12 months. The initial hype surrounding artificial intelligence (AI) centered around OpenAI and its ChatGPT platform, which quickly attracted a $10 billion investment from Microsoft in early 2023.
However, the technology industry quickly realized OpenAI's success wouldn't have been possible without Nvidia's specialized data center chips, which are designed specifically to process AI workloads. As a result, Nvidia experienced a tidal wave of demand -- from the smallest of AI start-ups to the world's largest tech giants.
Nvidia's H100 graphics processing unit (GPU) was the hottest piece of AI hardware last year, and it drove the company's data center revenue to $47.5 billion during its fiscal 2024 year (ended Jan. 28). That was a 217% increase from fiscal 2023.
As the below chart shows, the data center segment accounted for 78% of Nvidia's total revenue ($60.9 billion) in fiscal 2024. That's a substantial increase from just 12% in fiscal 2017, when the company generated just $830 million in revenue from the data center. Gaming dominated Nvidia's business back then.
Nvidia's hot streak still has legs
Nvidia will ramp up shipments of its new H200 GPU this year, which can inference (ingest live data so AI models can make predictions) twice as fast as the H100, while consuming half the amount of energy. That's a winning combination for data center operators, so demand could be off the charts for the new chip.
Nvidia is now a $2 trillion company, yet despite its surge in value over the past year, its stock isn't necessarily expensive based on forecast earnings per share for its fiscal 2025, which just began. Therefore, it won't be a surprise if Nvidia stock continues to trend higher.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
