While other companies are stuck in the metaverse (the virtual world), Nvidia (NASDAQ:NVDA) has its mind in the omniverse — a collaboration between the virtual and physical world.
What’s the big deal? The chipmaker has been on fire — up 48% in the past month — and recent news is only adding fuel. Nvidia is a powerhouse supplier of gaming, crypto mining, data centers chips — industries benefiting from COVID — giving it tremendous growth this past year.
Getting a head start in the metaverse/omniverse market is a logical next move for Nvidia — which specializes in artificial intelligence and advanced computing.
On Tuesday, Nvidia announced new projects to help companies enter the virtual world:
- Omniverse Replicator — a virtual world replicating real-world environments to collect data (i.e. self-driving vehicles, manufacturing, etc.).
- Omniverse Avatar — virtual characters that can interact with the real world to help with customer service, restaurant orders and other real-world applications.
Back to reality: Commercialization of its omniverse products is likely years away — and near-term results rely on tangible ones like:
- Continued demand for its computer chips post-COVID — the core of its business.
- The approval of a game-changing acquisition of ARM — a UK designer of microprocessing chips — with approval still uncertain.
But success isn’t guaranteed. The company struggled in 2018-2019 as it relied on providing chips to the crypto industry — just before the crypto industry crashed into a year-long bear market.
BMO recently raised Nvidia’s price target to $375 and is expected to report earnings on November 17.
The Joe’s take: We have no idea how or in what shape the metaverse will play out, but betting on the supplier of the tech powering the virtual world isn’t such a bad way to invest.
