Why Nvidia Stock Finally Popped Today

Image source: Getty Images.

Investors were mainly unimpressed with Nvidia's (NVDA 9.81 percent ) statements as the company's Graphics Technology Conference 2022 (GTC 2022) came to an end on Wednesday.

Image source: Getty Images.

Don't get me wrong: I think it's great. The announcements that Nvidia would improve its artificial intelligence products, build a supercomputer for advanced robotics, expand its virtual reality Omniverse, and so on were all amazing in and of itself.

Image source: Getty Images.

It's only that they were widely predicted, and the stock had already been "priced in," so they didn't persuade Wall Street investors to change their price expectations.

Image source: Getty Images.

That may have changed today, as Nvidia stock was up 5.8% at 11 a.m. ET.

Image source: Getty Images.

So, what's new today? One of the reasons Wall Street decided not to boost its price targets on Nvidia, as I wrote in yesterday's post, was that the company "didn't improve its guidance at all."

Image source: Getty Images.

Nvidia, on the other hand, appears to have heard it loud and clear, as MarketWatch reports that the company is now telling investors that it sees "a $1 trillion potential" in the several major areas of semiconductor growth that it is pursuing.

Image source: Getty Images.

Image source: Getty Images.

Breaking it down, Nvidia sees a total addressable market worth:

– $300 billion for sales of automotive chips – $300 billion more from sales of other chips and systems;

Image source: Getty Images.

– $150 billion from selling artificial intelligence enterprise software; – $150 million from Omniverse enterprise software; – And $100 billion in annual revenue from video gaming services such as GeForce Now.

Image source: Getty Images.

Add all that up, and what do you get? A $1 trillion market opportunity for Nvidia. 

Image source: Getty Images.

Nvidia's updated estimates were described as "quite high figures" by an analyst at Evercore ISI, and another at investment bank Bernstein complimented the business for offering a "clearer picture of the larger plan" moving forward. 

Image source: Getty Images.

The market is now "beginning to get an inkling of what might be achievable as we go down this road" toward a worldwide "Omniverse/Metaverse," according to the Bernstein analyst.