Shares of Nvidia (NVDA) are on the rise on Thursday after Wells Fargo analyst Aaron Rakers raised his price target on the stock to $320. The analyst expects the company to officially launch the general availability of Omniverse Enterprise next week at GTC 2021. The analyst told investors that he believes Nvidia Omniverse Enterprise represents a "significant" platform expansion strategy for the company, which also entails a deepening recurring software story.
'SIGNIFICANT' METAVERSE EXPANSION STRATEGY: Wells Fargo analyst Aaron Rakers raised the firm's price target on Nvidia to $320 from $245, while keeping an Overweight rating on the shares. The analyst notes Nvidia is expected to officially launch the general availability of Omniverse Enterprise next week at GTC 2021. He expects this to be one of the key highlights and sees Nvidia Omniverse as a key enabler/platform for the development of the Metaverse across a wide range of vertical apps, including industrial, manufacturing, design and engineering, autonomous vehicles/robotics, and more. Nvidia Omniverse Enterprise represents a "significant" platform expansion strategy for the company, which also entails a deepening recurring software story, Rakers contended, adding that the Omniverse Enterprise also presents a halo effect to the company's product portfolio.
The analyst noted that Omniverse is an open virtual platform that allows creators to collaborate in real-time physically accurate simulations/3D renderings. Nvidia more succinctly described it as a "platform for connecting 3D worlds in a shared virtual universe." The key technology powering Omniverse is Nucleus - a database engine that allows client applications to share and modify 3D assets and scene descriptions. Nucleus is based on Pixar's open Universal Scene Description technology, which provides a common language for defining digital assets. Rakers pointed out that Nvidia released an open beta of Omniverse in December 2020, and announced coming general availability of Omniverse Enterprise in April 2021. Omniverse Enterprise subscription starts at $9,000 per year for a workgroup of two creators, 10 reviewers, and 4 Nucleus subscriptions.
FACEBOOK IS NOW META: Last week, Facebook (FB) announced it was changing its company name to Meta to reflect its ambitions beyond social media. The new moniker is based on the sci-fi term metaverse and used to describe its vision for working and playing in a virtual world. "Meta's focus will be to bring the metaverse to life and help people connect, find communities and grow businesses," the company said a statement. Facebook said that while its corporate structure is not changing, how it reports on financials will. Starting with its results for the fourth quarter of 2021, the company plans to report on two operating segments: Family of Apps and Reality Labs. Facebook intends to start trading under the new stock ticker "MVRS" on December 1.
NIKE PREPARING FOR METAVERSE: Nike (NKE) has filed seven new trademarks this week that indicate its intent to make and sell virtual Nike-branded sneakers and apparel, CNBC's Jessica Golden reported on Tuesday. People familiar Nike's plans said the metaverse is a priority for the brand and consumers can expect to see more virtual rollouts in the months ahead. According to the U.S. Patent and Trademark Office, Nike filed applications on October 27 for "Nike," "Just Do It," and its swoosh logo, and later filed for the "Air Jordan" and "Jumpman" logos.
OTHERS TO WATCH: Microsoft (MSFT) CEO Satya Nadella said in an earnings conference call earlier this year that the company was working to build an enterprise metaverse, while Roblox (RBLX) said it envisions the metaverse as a place where "people can come together within millions of 3D experiences to learn, work, play, create and socialize."
PRICE ACTION: In Thursday morning trading, shares of Nvidia have gained over 7% to $285.79.
