Nvidia CEO Jensen Huang signs Toyota, Fanuc, Kioxia into Physical AI coalition; confirms $1 trillion demand through 2027

Nvidia Reports $1 Trillion in Confirmed Demand Through 2027

By John Ballard, The Motley Fool Published: July 25, 2026, 2:59 AM PDT | Updated: 9:59 AM ET

Nvidia (NASDAQ: NVDA) stock has risen 12% year-to-date, outperforming the Nasdaq's roughly 9% return at the time of writing. However, the company is not resting on its laurels. As competition in the semiconductor industry intensifies, CEO Jensen Huang is focused on keeping Nvidia at the forefront of artificial intelligence (AI) technology.

To that end, Huang is positioning the company to lead in physical AI, including robotics. He recently met with leaders of several Japanese industrial giants—Toyota, Fujitsu Limited, Kawasaki Heavy Industries, Fanuc, and Kioxia—to discuss implementing physical AI in their factories.

As Huang stated: "The next frontier of AI is in the physical world, and this is a once-in-a-generation opportunity for Japan."

Three major robotics and automation players—Kawasaki, Fanuc, and Yaskawa—are already using Nvidia's technology. These partnerships align with Nvidia's broader strategy to be at the center of every major transition in computing.

What This Means for Nvidia's Prospects

Nvidia has restructured its financial reporting to align with future growth drivers. Under this new framework:

• Data Center Segment: Reported $75 billion in revenue last quarter, up 92% year over year.
• Edge Computing Segment (robotics, automotive, PCs): Generated $6.4 billion in revenue, up 29%.

Near-Term Outlook

Physical AI is not expected to significantly impact the stock in the immediate term. Management projects $1 trillion in revenue from its Blackwell and Rubin chips from 2025 through calendar 2027. The data center business—driven by chips and networking products for AI data centers—remains the primary growth engine.

Long-Term Potential

Physical AI represents the next logical step for the technology, offering substantial growth potential for Nvidia's edge computing business. Mirroring its data center strategy, Nvidia has developed a full-stack offering that includes:

• DGX Computing Systems (Blackwell/Vera Rubin)
• Jetson Robotics Computing Platform
• Cosmos – for simulating the physical world to accelerate robot development

As Advanced Micro Devices and Broadcom challenge Nvidia's data center lead, Huang is positioning the company for the next major AI transition. Nvidia's tailored computing solutions for specific industries—such as manufacturing—provide a competitive advantage, along with its deep relationships with enterprises and AI researchers worldwide.

Stock Valuation

The recent announcements from Japan are bullish for Nvidia's long-term prospects, though the data center business will remain the key catalyst for the stock in the near term. Shares currently trade at 23 times forward earnings, with analysts noting the valuation appears attractive.

Stock performance references: NVDA -0.92%, TM +0.35%, 6954.T -4.53%, ^IXIC -0.64%, 6702.T +1.08%