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- Nvidia (NASDAQ:NVDA) is 11.6% higher today following a sharp price-target hike at Wells Fargo, which is expecting an upcoming strategy announcement to shore up the chipmaker's approach to the burgeoning "metaverse."
- The company is set to officially announce general availability of Omniverse Enterprise on Tuesday, at next week's GTC 2021. The highlight of the event will be a keynote address by Nvidia (NVDA) Chief Executive Jensen Huang.
- "We see Nvidia Omniverse as a key enabler [and] platform for the development of the Metaverse across a wide range of vertical apps—industrial, manufacturing, design & engineering, autonomous vehicles, robotics, etc.," wrote Wells Fargo analyst Aaron Rakers, in a research note. Rakers said Omniverse Enterprise is a "significant" expansion strategy that also plays on Nvidia's (NVDA) recurring software story.
- Subscriptions to Omniverse Enterprise start at $9,000 a year for a small workgroup of creators. And Nvidia (NVDA) has outlined a total addressable market of about 20 million designers and engineers who could benefit; Wells Fargo says the Metaverse could mean a $10 billion incremental market opportunity for Nvidia in the coming five years.
- "Long term, we think the market opportunity could be even greater as digital assets and digital twins become significant economic drivers," said Rakers, who raised his price target on Nvidia's (NVDA) to $320 share from $245, implying a further 8% increase on top of Thursday's gains.
- Rakers said that more than 50 times its estimated 2023 price-to-earnings ratio, Nvidia's (NVDA) shares aren't cheap. However, Rakers said the price is "justifiably reflective of a deepening [and] expanding platform story" that includes increasingly visible recurring subscription software contributions to revenue.
- As trading progressed, Thursday, Nvidia's (NVDA) shares hit a 52-week-high of $299.27 a share, and gave the company a market cap of $738n billion, making the chipmaker the 8th-most valuable company in the world.
- Nvidia (NVDA) is still in the process of acquiring British chipmaker Arm Holdings, but is facing new European Union inquiries into the deal.