Nvidia ()

It's no secret that Nvidia (NVDA) was the best performing stock in the S&P 500 in 2016, gaining more than 370%. But while the company's graphics processor unit (GPU) chips are being used in everything from gaming PCs to autonomous cars to virtual reality to data centers, the reinvigoration of Nvidia is built by one thing: artificial intelligence.

AI is increasingly being used in everything and everywhere, most notably data centers for machine learning, where Nvidia's GPUs have a tremendous lead over the competition, including anything from AMD (AMD) and Intel (INTC). Data center revenue was up 67% year-over-year in the quarter at $296 million and more impressive, up 23% from the impressive fiscal third-quarter 2017 results that helped send the stock soaring more than 30% in November 2016.

The technology is touching everything and anyone, be it on your smartphone or when you shop on Amazon (AMZN) or using software. In fact, Nvidia CEO Jen-Hsun Huang told Barron's that AI is just the future of software.

If you read Nvidia's conference call transcript and its earnings press release, AI is mentioned everywhere and with good reason: deep learning is only made possible by the advancements in AI being made by university researchers and big companies such as Google (GOOG), Apple (AAPL), Facebook (FB), Amazon and others.

In reacting to the blow-out earnings results, Jefferies analyst Mark Lipacis called Nvidia essentially the only publicly traded company solely focused on AI. "[Nvidia] posted its 7th consecutive beat, and while YoY rev growth of 55% likely marks 2nd derivative peak, the 200% growth in its Datacenter business and improving GM reinforce our thesis that NVDA is emerging as the de facto standard in AI - one of the most exciting growth drivers in tech," Lipacis wrote, while raising his price target to $140 from $125.

Of the aforementioned areas, perhaps the one that is most tangible to show consumers the AI revolution is autonomous driving.

Tesla (TSLA) and CEO Elon Musk have pioneered autonomous driving in the Model S (though to which extent is up for debate), but Tesla has chosen to use Nvidia's chipsets to not only help it with its infotainment unit, but more importantly, the software that helps with autonomy, using the NVIDIA DRIVE™ PX 2 AI computing platform.

Society is a little bit away from true autonomy in a car (Level 5), in which a human does not need to do anything, but Tesla is working on getting towards Level 4/5 faster than anyone else, thanks to Nvidia. (For a good primer on what each level means, click here.)

Nvidia has several other automotive partnerships, including recently announced ones with Bosch and Audi.

All of this highlights that self-driving cars is not just a science fiction fantasy, it's real and it's coming. And it's being powered by AI. The societal impact AI will have is up for debate, whether it will be a net positive or a net negative, but there is no stopping it.

AI is continuing to become more prevalent in everything we do, but we are nowhere near general AI, in which computers can make decisions just as a human can. What we're experiencing right now is soft (weak) AI, in which humans tell a computer to do a task and it does it better than any human can. But thanks to deep/machine learning, we're getting closer to general AI, even if it's still decades away. That means the AI revolution is only just getting started and it has years and years on which to run.

All thanks to Nvidia.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.