This AI stock could be the biggest winner since the Robotaxi event (hint: it’s not Tesla)

After a long wait, adze (TSLA -3.70%) is finally ready to pull back the curtain on robotaxi.

It’s unclear exactly what will happen at the Oct. 10 robotaxi event, but analysts expect Tesla to release an update on its fully self-driving technology, which CEO Elon Musk sees as the cornerstone of the company’s auto business. the company.

Some analysts hope Tesla will finally unveil the actual robotaxi model, which Musk described as a small autonomous vehicle (AV) that people can own and rent, as a Uberwhile they are not using it, allowing the vehicle to earn money for the owner and essentially pay for itself.

Tesla may also unveil its lower-priced Model 2 vehicle and provide information on the production, launch and operating platform for the robotaxi.

The stakes are high with the robotaxi unveiling, as Tesla maintains a high valuation even as the business has practically declined, with unit sales and revenue growth now flat, while profits have fallen in recent quarters.

Musk has repeatedly touted the importance of autonomy for Tesla, saying on the second-quarter earnings call: “I can’t stress (enough) the importance of autonomy for the vehicle side and for Optimus (its autonomous robot). ”

The Nvidia angle

The Robotaxi has the potential to be a juggernaut for Tesla. Musk agreed with Cathie Wood’s estimate of a $5 trillion valuation for Tesla once robotaxis takes off, but there’s another stock that could be a big winner in the excitement for self-driving vehicles.

Autonomous vehicles cannot function without a massive artificial intelligence (AI) infrastructure, and it is arguably the most demanding AI project in the works.

these days, Nvidia (NVDA 2.24%) makes a significant percentage of the components that make autonomous vehicles work, which puts the chip stock in the driver’s seat of a potential autonomous vehicle boom. Tesla uses 35,000 Nvidia Hopper GPUs for its full self-driving AI cluster. The cost for those GPUs at current prices is about $1 billion.

Musk has also praised Nvidia several times and said how crucial it is for Tesla to get Nvidia GPUs when it wants them. At a recent dinner shared by Musk, OracleApparently, Larry Ellison and Nvidia CEO Jensen Huang, Musk and Ellison spent much of the night “begging” Huang for more GPUs.

Fully autonomous driving and expanding robotaxi operation is a key AI priority for Tesla, so it appears that Musk plans to implement at least some of these GPUs for fully autonomous driving.

The autonomous vehicle landscape beyond Tesla

Tesla isn’t the only player in AVs. Alphabetis Waymo and General MotorsCruise has already deployed self-driving vehicles on city streets, and almost all automakers and several start-ups are working on the technology.

If Tesla is successful with its robotaxi, it is likely to trigger an arms race in AV technology, just as OpenAI did with large language models when it launched ChatGPT, and Nvidia is likely to be a winner in a boom AV, similar to how it was with generative AI.

While its Drive AV platform doesn’t get as much attention as data center GPUs today, the technology is used by a number of automakers, including Volvo, Daimler, Hyundai, Nopeand Rivianwhich makes Nvidia a likely winner as the industry grows.

The AV business is still small, as its autonomous and robotics segment brought in just $346 million in the second quarter, compared to $26.3 billion from the data center. However, Nvidia investors should be on the lookout for Thursday’s robotaxi presentation, especially since it could include details about Nvidia’s products used in the technology.

If investors like what they see, it could spark another bull run in Nvidia stock.