Nvidia (NASDAQ:NVDA) stock is here to stay and soar.
Known for the best graphic cards in the industry, NVDA is a hot tech company today. It has taken the video game experience to another level and has made intensive video games a reality.
It generates a significant part of the revenue from the gaming industry and has set a gold standard.
It is up nearly 60% in the past six months and has gone from $180 to about $283 today. The stock has consistently grown with time and I believe it will continue the upward movement for the months to come. With that in mind, let us dig deeper into my investment thesis for NVDA stock.
GPUs Are the Driving Force
Nvidia dominates the graphics processing market and it will continue to do so. As more people got used to playing video games as a result of the pandemic, the demand for GPUs rose.
However, all the industries suffered due to the chip shortage but it did not put the brakes on Nvidia’s growth story.
The gaming market is only going to grow bigger in the coming years and this means Nvidia has a massive growth opportunity to expand. It has the potential to dominate the market if it continues to grow at the current pace.
It has already introduced GeForce Now cloud gaming service. Although it is new, it has unique expansion opportunities in the near term.
The Metaverse and NVDA Stock
Nvidia is so much more than the gaming industry. The company is connected with Metaverse through the Omniverse platform, which is a real-time 3D simulation platform for autonomous vehicles.
CEO Jensen Huang believes that Metaverse will be much bigger than the world we live in. Omniverse allows users to build virtual worlds and it has applications for businesses. The opportunities in this area are endless and they will help Nvidia grow bigger.
NVDA stock will see a surge as more businesses adopt their platforms to grow.
Metaverse is certainly in a nascent stage and it has a lot of room to expand but Nvidia is ready to make the most of this opportunity.
Although we only recently got to know about the Metaverse, Nvidia was already working on it. The company has an actual strategy around it and is launching products for the platform.
It will launch the Replicator service which will allow the developers to intertwine the real world and synthetic data to stimulate the 3D world. It helps with the development of robotics and autonomous vehicles.
Another is the Omniverse Avatar. It is Nvidia’s platform where you can generate interactive AI Avatars. It can be used for content creation, collaboration, and customer service.
If you are wondering how Nvidia will make money through this, there is an obvious answer: licensing. The company will use the licensing route to optimize the platform and considering the number of businesses that use Nvidia technology, the company will not have to worry about the monetization route.
The Bottom Line on NVDA Stock
Nvidia offers several opportunities to cash on in. I believe the company will grow faster than ever and its earnings will reflect the same.
NVDA stock may not be cheap but it is worth the money. The stock has only been growing in the past six months and it will continue to do so in the coming year. Several catalysts are working in favor of Nvidia and it has already established itself as a top player in the industry.
Metaverse will be huge for the company but gaming will continue to generate the most revenue. It does not look like Nvidia’s growth momentum will slow anytime soon. The sooner you buy NVDA stock, the better the chances of generating returns.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.