By Daniel Sparks, The Motley Fool
Publication Date: 2026-10-10 00:01:00
A rival chipmaker agreed last month to pay $8.2 billion in shares to push further into this area of AI.
Key Points
Auto industry customers spent around $8 billion on Nvidia’s AI systems for their own facilities in a recent 12-month stretch.
Nvidia’s automotive revenue was around 1% of its total sales in fiscal 2026.
Nvidia’s stock price is around 15 times its expected earnings per share for fiscal 2028.
Physical AI is the name Nvidia(NASDAQ:NVDA) uses for artificial intelligence (AI) that works in the real world instead of onscreen. Picture the software that lets a warehouse robot lift a box, or a car steer itself through traffic. A chatbot just has to write an answer, but physical AI has to see what’s around it and then choose what to do.
Rivals want in. Advanced Micro Devices(NASDAQ:AMD) said on Sept. 28 that it had agreed to buy World Labs, a start-up that makes AI models of 3D spaces and tools for training robots, in an all-stock deal worth around $8.2 billion.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
But for Nvidia, physical AI is still a small business in a huge firm. Its automotive revenue was around $2.35 billion over the 12 months through late January 2026 (Nvidia’s fiscal 2026), or about 1% of its total revenue of $215.9 billion. Even Nvidia’s broader…
