Nvidia has been one of the top-performing stocks on the market in the past year with outstanding gains of 215%, which is not surprising as the company has absolutely dominated the market for artificial intelligence (AI) chips and witnessed remarkable growth in its revenue and earnings.
However, there is one business where Nvidia is still lacking. The company’s revenue from the automotive segment stood at $1.1 billion in fiscal 2024, an increase of 21% over the previous year. The segment turned in a tepid performance in the final quarter of the fiscal year, with a year-over-year decline of 4% in revenue to $281 million.
Nvidia has been trying to make a dent in the market for automotive chips for a very long time, once boasting customers such as Tesla. However, Nvidia has failed to make it big in this business so far. The automotive chip market was worth an estimated $51 billion last year, becoming the third-largest end market for chips.
Nvidia’s automotive revenue last year indicates that it has managed to capture just 2% of this market, which may seem a tad surprising as the company is known to dominate the markets in which it operates. However, there is one company that’s making solid progress in the automotive chip market and seems set to become a key player in this space in the future — Qualcomm (NASDAQ: QCOM).
Let’s look at the reasons why the automotive market could give Qualcomm a nice boost.
Qualcomm’s automotive chip pipeline is expanding at an impressive pace
In the second quarter of fiscal 2024 (which ended on March 24), Qualcomm posted $603 million in automotive revenue, up an impressive 35% from the year-ago period. It is worth noting that the chipmaker’s automotive revenue grew at a faster pace than its overall revenue, which was up just 1% year over year to $9.38 billion.
The automotive business accounted for 6.5% of Qualcomm’s total revenue in the previous quarter. While that’s not very significant, investors should note that the automotive business produced 4.8% of its top line in the same period last year. More importantly, this segment seems set…
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