Nvidia’s Custom CPU Expansion Is the Next $200B Catalyst.

Nvidia (NASDAQ:NVDA | NVDA Price Prediction) is back on top of the market cap leaderboards, thanks in part to Elon Musk’s Space Exploration Technologies (NASDAQ:SPCX), which announced that it’ll use Nvidia GPUs exclusively. That’s a pretty big win for Jensen Huang and a huge blow to its rivals.

The big question, in my view, is whether SpaceX will be the only mega-cap titan to go exclusive to Nvidia and what the perks will be for doing so. Indeed, Nvidia has the best tech in the world and, until that changes, perhaps the $5.3 trillion juggernaut has what it takes to influence other firms to be loyal.

With the Vera Rubin era upon us, it finally looks like Nvidia stock has what it takes to return in full-on bull market mode. The next-generation Rubin GPU is going to be a hot seller. That much is a given.

To keep the needle moving higher, Nvidia needs to go above and beyond, and with its deeper dive into custom CPUs, perhaps Nvidia is ready to go big in its next big total addressable market (TAM) in the hardware layer of the five-layer cake. Nvidia sees the CPU market being worth a whopping $200 billion. And early signs suggest that Vera is going to hit the ground running.

The CPU opportunity might still be underestimated

As we reach an inference inflection point, a powerful GPU is only as good as the CPU it’s paired with. And with Vera Rubin scoring obscene performance and efficiency gains, questions linger as to whether there’s anyone out there that can keep up as Nvidia looks to raise the bar on AI chips another level higher, perhaps high enough to convince customers to stay loyal to Jensen Huang and company.

As the tech world rings in the agentic AI era, agentic-first CPUs could be every bit as important as GPUs. And with Vera built with agentics in mind, it feels like the new chip could evolve into a serious contributor that analysts might still be underestimating.

What’s most interesting is that Nvidia has only scratched the surface of a CPU market that it is more than capable of dominating. If it can stand head and shoulders above the competition in GPUs, you can bet that the firm can repeat the magic formula in CPUs as well. Add the RTX Spark desktop chip into the equation, and it certainly feels like the Nvidia roadmap is hard to bet against as Nvidia makes a huge splash into the world of CPUs.

It’s becoming hard to bet against Jensen Huang

Even as Dr. Michael Burry stays short Nvidia, I do think that few will be able to deal with the pain that comes with holding onto bearish put options or a short position, especially as the seemingly undervalued shares (33.5 times trailing price-to-earnings) look to be snatched up by excited investors looking to enter the next inning of the AI ballgame with perhaps one of the best-positioned companies in the semiconductor space.

And, right now, the stock looks to be one of the cheapest names in the space in spite of its dominance and new “circular” deals that might be more about loyalty and exclusivity than the actual appreciation potential of the investment itself. Even Michael Burry called Nvidia “mafia-like,” as the man took shots at the firm. Perhaps there’s a reason many refer to Jensen Huang as the Godfather of AI.

With incredibly powerful chips and a new growth market in sight, perhaps loyalty and exclusivity could be the new theme as Nvidia looks to pull further ahead of its rivals in chips.

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