Nvidia (NASDAQ: NVDA ) It has surprised investors quarter after quarter with explosive earnings growth. That’s thanks to the company’s expertise in artificial intelligence (AI), a market that analysts say will soon be worth more than $2 trillion. Nvidia’s primary strength was in the graphics processing unit (GPU), or key AI functions powering the AI chip, but the company has worked to expand that, including a variety of other related products in its portfolio.
Today, AI customers turn to Nvidia for a complete offering, from chips to networking devices and software. And that translated to another quarter and a year of tremendous growth. In the fourth quarter and full year of fiscal 2026, Nvidia delivered double-digit revenue gains and strong sales gains, with gross margins reaching 70%.
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Although the business is growing, is the number one below Nvidia’s biggest risk?
Before we consider that, let’s look at how Nvidia’s business has evolved since its early days. The company has been around for more than 30 years – one thing that hasn’t changed is Nvidia’s strength in designing GPUs. But what has changed is the company’s focus. For years, Nvidia’s biggest business was the video game market, but as the AI boom grew, the company made big moves to target it.
Nvidia designed its chips specifically to meet the needs of AI customers, and it did so before AI really took off. It was a risky bet, but as we can see now, it was the right move. Thanks to this decision, Nvidia’s revenue has reached new heights. And the stock’s performance has followed with shares rising 1,300% over the past five years.
But it also puts Nvidia in a position that some might see as risky. The company now generates 91% of its revenue from its data center business, or AI data center customers. This Nvidia relies heavily on AI for growth. Is this one of Nvidia’s biggest risks?
We all know it’s not a good idea to put all your eggs in one basket. But here it is necessary to mention a few things. First, Nvidia hasn’t abandoned other sources of revenue, such as gaming and professional viewing. And sectors like automation, robotics, and ultimately telecommunications represent other areas of AI growth beyond data centers.
