Can NVDA Stock dethrone Facebook? What you need to know about Nvidia’s Metaverse plans.
The supply chain crisis poses challenges for electronics producers who depend on semiconductors. A company that produces the actual components, however, finds ways to adapt. Nvidia (NASDAQ:NVDA) is known for his work in designing and producing various chips. NVDA stock has been in the green all season, but recent positive commentary from analysts has highlighted the company’s potential in an emerging and high-profile market. What it looks like from here, this growing tech player could be about to challenge one of the titans of the industry.
What’s going on with NVDA Stock
Nvidia rose steadily throughout the fall, but caught fire today after an analyst released a bullish price target, predicting a bright future for NVDA stock. Wells Fargo’s Aaron Rankin lifted his 30% share price target from $ 245 to $ 320, maintaining an âoverweightâ rating. Rankin Noted that he expects Nvidia to âofficially launch general availability of Omnivers Enterpriseâ at GTC 2021 next week, a free digital AI conference for everyone. He also cited the potential of Nvidia Omniverse to serve as a âkey platform / catalyst for the development of the metaverseâ.
This kind of positive coverage from analysts tends to drive stocks higher and Nvidia was no different today. As of this writing, NVDA shares are up over 12% for the day. Over the past month, however, the stock has climbed an impressive 43%, from less than $ 200 per share to its current price of just under $ 300. This stock shows no signs of slowing down.
What this means
Since the social media giant Facebook (NASDAQ:FB) officially changed his company name to Meta, companies worked tirelessly to get into the Metaverse. We have seen these initiatives of Nike (NYSE:NKE) and Microsoft (NASDAQ:MSFT), but a company in the Nvidia space might actually be able to challenge Facebook. NVDA is also poised to benefit from the new metaverse focus that isn’t going away anytime soon.
As Rankin pointed out, the metaverse will create opportunities in manufacturing, design and engineering as well as in autonomous vehicles and robotics. An open virtual platform designed for collaboration between creators with physically accurate simulations and 3D renderings, Nvidia’s Omniverse certainly has the power to connect 3D worlds in the same way Meta seeks to do. It’s powered by Nucleus, technology based on Pixar’s open universal scene description in which digital assets are defined by a common language.
Why is this important
Meta may be the company that has shifted the world’s attention to the Metaverse, but it will need to be wary of other companies with competing technology.
October ended with Bank of America increasing its price target for Nvidia and the release of a report recognized that Small Business Omniverse would position it perfectly to benefit from Meta’s expansion into a field much more reliant on IT and AI. There is no doubt that this new expansion will prove to be an important revenue driver for Nvidia. Depending on the quality of its reception and the success of Meta’s deployments, the former could be a real challenger.
As it stands, the worst-case scenario seems to be that the Omniverse will help grow NVDA’s inventory even further and solidify the company as a player in the metaverse race. At the best of times, he is able to pose a significant challenge to Meta, a company known to acquire its competitors. Either way, NVDA is a stock to watch out for.
At the date of publication, Samuel O’Brient had (directly or indirectly) no position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.