AI is driving the stock market, which, in a nutshell, is why Nvidia matters to just about every stock, including Tesla. Shares of both companies were relatively stable after Nvidia reported better-than-expected fiscal fourth-quarter numbers.
Wednesday evening, Nvidia reported sales of about $68 billion, up from $39 billion a year ago, easily topping Wall Street estimates for $66 billion and Nvidia's own guidance for sales between $63.7 billion and $66.3 billion. Guidance for the first quarter also looked solid. Nvidia expects sales of $78 billion, topping Wall Street's $73 billion projection.
AI demand is alive and well. Still, Nvidia stock was up 1% in premarket trading Thursday, while S&P 500 and Dow Jones Industrial Average futures were up about 0.1%. Tesla stock was down 0.5%.
Nvidia's earnings, of course, don't necessarily affect Tesla. Still, Tesla is an Nvidia customer, working on "physical AI" applications that interact with the real world, including robots and robo-taxis. And many tech stocks are correlated with each other.
Nvidia CFO Colette Kress did say that "physical AI" sales are on the rise, amounting to $6 billion in fiscal 2026. (Nvidia's fiscal year ended in January.) She called out AI-trained robo-taxi operators, including Tesla and Alphabet's robo-taxi company Waymo. Physical AI "expansion will demand orders of magnitude more compute, with every major [car maker] and service provider developing on Nvidia's platform."
It will take more Nvidia GPUs to train robo-taxis and robots than it did to train the AI chatbots that are writing computer code and college essays.
CEO Jensen Huang added that AI-trained robotics is a "wonderful opportunity" for his company.
Tesla CEO Elon Musk believes robotics is a multi-trillion-dollar opportunity for his company. The EV maker will design and manufacture the robots, and Nvidia will help train them with advanced AI computing power.
Nvidia needs AI applications to proliferate. Tesla needs AI to work. It's a symbiotic relationship now for now.
Coming into Thursday trading, Tesla stock was up 44% over the past 12 months. Nvidia shares were up 49%.