Why Nvidia Stock Rocketed Higher Today
What happened
For the sixth day in a row, shares of semiconductors specialist Nvidia (NASDAQ: NVDA) marched higher Thursday -- actually, they kind of ran higher, running up 8.5% through 11:11 a.m. EDT on the back of positive analyst commentary from Wells Fargo.
The same kind of commentary, I might add, as Bank of America provided last week.
Image source: Getty Images.
So what
On Oct. 29, BofA reiterated its buy recommendation on Nvidia stock, explaining that the graphics chip maker will be one of the prime beneficiaries of Meta Platforms' (NASDAQ: FB) -- that is to say Facebook's -- drive to create a metaverse for all of us to live in online. Indeed, BofA pointed out that Nvidia already has an "Omniverse" platform of its own, and is well positioned to provide Facebook "the crucial building blocks in graphics, connectivity, mobility, and computation/AI," reported StreetInsider.com.
Of course, even all these positives only added up to $275 in Nvidia value according to BofA. Today, Wells Fargo has come out with an even more optimistic estimate, raising its price target and valuing Nvidia stock at a lofty $320 a share.
Now what
The catalyst for this sharp spike in Nvidia shares, predicts Wells Fargo, will be an Nvidia presentation at the GPU Technology Conference that will be held online from Nov. 8 to Nov. 11. There, Nvidia will announce that its Omniverse Enterprise platform -- which Nvidia describes as a "platform for connecting 3D worlds in a shared virtual universe -- is open for business.
Nvidia will be charging users as much as $9,000 per year per "workgroup" accessing the Omniverse, reports TheFly.com. In Wells Fargo's opinion, this new product will be not only a "significant" expansion for Nvidia, but a potential huge recurring revenue driver for the company as well.
Investors seem to agree with that assessment today.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Meta Platforms, Inc. and Nvidia. The Motley Fool has a disclosure policy.
