Going into 2017, there was certainly lots of optimism with Nvidia Corporation (NASDAQ:NVDA). Yet many investors underestimated the tremendous momentum. For the year so far, NVDA stock has pulled off a sizzling return of over 100%.

Note that the company is now the third-largest chip company in the world. Its market cap is currently at $128 billion.

This achievement makes CEO and co-founder Jensen Huang one of the top players in the tech world. Early on, he understood the power of GPUs (graphics processing units), which would ultimately be ideal for the mega-trend of AI (artificial intelligence). After all, this technology allows for tremendous processing power at relatively low costs.

But Huang also was strategic in how he evolved his company and focused on disciplined execution. In fact, the latest earnings report highlights this. In the quarter, revenues jumped by 32% to $2.64 billion, and earnings increased by 60% to $1.33 per share. The Street, on the other hand, was looking for revenues of $2.36 billion and earnings of 94 cents a share.

However, when you drill down on the numbers, you’ll see how Nvidia is being powered across several key markets, all of which have long-term potential. Here’s a look at these key markets.

Datacenter: This has become the focal point of AI. Companies like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL) are aggressively building consumer-facing apps and devices that require next-generation infrastructures.

For the most part, this has resulted in accelerated sales of NVDA’s Volta GPU. It’s a chipset that has been adopted by every major internet and cloud service provider. Consider that some of the recent customers include biggies like Alibaba Group Holding Ltd (NYSE:BABA), Tencent Holdings Ltd (OTCMKTS:TCEHY) and Baidu Inc (NASDAQ:BIDU).

But of course, NVDA has continued to innovate its offerings. To this end, there is the TensorRT inference acceleration platform, which is focused on the fast-growing hyperscale cloud market. Already more than 1,200 customers have signed on, including Google, BIDU, AMZN, MSFT and JD.Com Inc (ADR) (NASDAQ:JD).

Gaming: Even though this is a mature market category, the growth continues at a robust pace. During the latest quarter, revenues rose by 25% to $1.56 billion. It appears that a nice catalyst has come from the sales of the popular Nintendo Switch. But there has also been a lift from collaborations with Activision Blizzard, Inc. (NASDAQ:ATVI), such as with the Density 2 title.

Automotive: This division actually underperformed somewhat during the quarter. Revenues increased by 13% to $144 million, but the Street was forecasting $158.6 million.

Yet investors should not be too concerned. The automotive business is still in the early stages, which means there will be choppiness. Besides, NVDA has launched its new platform, called Drive PX Pegasus. It’s the first AI computer that enables Level 5 driverless vehicles. The system processes 320 trillion operations per second!

Bottom Line on NVDA Stock

Of course, not all the NVDA news is good. Perhaps the biggest issue with the company is that the competitive environment is heating up.

For example, Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC) recently entered an agreement to develop a new gaming chip for laptops. This was enough to knock down NVDA stock — at least temporarily.

But then again, NVDA’s markets have enough room for several players. According to IDC, the global spending on AI hardware and software technologies is expected to jump from $12 billion in 2017 to a whopping $57.6 billion by 2021.

OK then, but what about the NVDA stock price? Isn’t it at bubbly levels? True, NVDA stock is far from cheap, with a forward price-to-earnings ratio of 46X. But in light of the runway for growth and the industry-leading technologies, the company certainly deserves a premium.

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.