Nvidia's next 'holy grail' is physical AI: Dan Ives

Next year will be when we see physical AI manifesting in Nvidia's ( NVDA ) financial statements.

Think: Nvidia's high-powered AI chips driving robotics and greater automation inside companies.

"Physical AI, I think that will be the holy grail for Nvidia. Because when you think about robotics and physical AI, that will be multitudes more than the spending that we're seeing today," Yorkville Ives partner and longtime tech analyst Dan Ives said on Yahoo Finance's Sozzi Unleashed .

For now, the drivers of Nvidia are likely to be earnings tied to the AI boom — and a whopping new stock buyback plan .

The king of AI chips revealed a stunning new $150 billion stock buyback plan on Monday — the largest share repurchase authorization increase in history. It brings the company's total buyback authorization to $235 billion.

Nvidia shares have typically gained a solid 24% in the 12 months after announcing a large stock buyback plan, according to data crunched by FedWatch Advisors founder Ben Emons.

Nvidia CEO Jensen Huang likely sees a great moment to buy back the company's shares on the cheap, ahead of further acceleration in AI development.

Nvidia's forward price-to-earnings (P/E) multiple has declined steadily since August 2024, when artificial intelligence began to take hold, unleashing a boom in the company's stock price and earnings growth.

The decline has only accelerated this year despite a series of strong quarters.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show and the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.