Why Nvidia Stock Rocketed Higher Today
What happened
After three days of uninterrupted selling, shares of semiconductor star Nvidia (NASDAQ: NVDA) soared on Tuesday -- up 6.5% as of 12:10 p.m. ET.
You can probably thank investment bank Cowen for that.
Image source: Getty Images.
So what
Nvidia's incredible shrinking stock price -- down 25% since the start of this year -- gives investors an opportunity to buy one of the strongest plays on the metaverse on the cheap, argues Cowen in a new report covered by StreetInsider.com today.
The metaverse today may be a concept in its infancy. But as Cowen explains, when combined with Nvidia's other offerings in data centers, in video gaming, in "professional visualization," and automotive technology, this new virtual world could help Nvidia grow into a $140 billion in annual sales monster by 2030, with $28 in annual earnings per share.
Now what
Those aren't typos. Cowen literally just said that Nvidia -- which generated less than $27 billion in sales last year, and earned under $4 a share according to data from S&P Global Market Intelligence -- could potentially quintuple its revenue and septuple its earnings as little as eight years from now.
"Omniverse represents a monetizable intersection of NVIDIA's accelerated hardware, AI-based computing platforms, and rendering/animation expertise," explains Cowen. As the addressable market for metaverse-related technologies grows from less than $30 billion today, the analyst believes that this "clear technological leader" will claim an increasing share of this market, going from $0 to $10 billion in metaverse revenue by 2030.
Cowen calls this "a significant runway for growth" -- and if it turns out to be right about those revenue and earnings predictions, that could be the understatement of the century.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool has a disclosure policy.
