Cramer Sees Big Things For Nvidia


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Chip maker Nvidia  (NVDA) – Get NVIDIA Corporation Report has posted strong earnings and great share prices, but that’s just the beginning. 

Jim Cramer sees even bigger potential for the company as tech companies begin to push the virtual reality platforms known as “omniverse” and “metaverse.”

Cramer and the Action Alerts Plus team recently noted that Nvidia “Once again reported very strong results with its fiscal second quarter 2022 results.”

“On the top line, record revenue of $6.507 billion (+68% YoY) outpaced the $6.325 billion consensus with Gaming, Data Center and Professional Visualization all seeing record quarterly revenues. On the bottom line, adjusted earnings per share of $1.04 (+89% YoY) exceeded expectations of $1.02 per share.”

“On the margin front, Nvidia's adjusted gross margin came in at 66.7%, representing an expansion of 600 basis points over the prior year (70bps sequentially). This result was also better than the 66.3% consensus forecasts.”


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All of this is great news for current investors, but there’s much more to this story.

“Nvidia specializes in graphics processing. This isn’t its only business, but most of the company’s chips (known as video cards) produce video and gaming results. It particularly made its name in the market for high performance computer games. While all computers need some form of video processor, Nvidia’s most profitable technology has always appealed only to the relatively small segment of the market that wants high fidelity digital universes.”


That market may be about to change thanks to the company's Omniverse offering, a “simulation and collaboration platform that provides the foundation of the metaverse.”

“Over 500 companies are evaluating Omniverse Enterprise … including BMW and Volvo, and more than 50,000 individual creators have downloaded Omniverse since it entered open beta in December.”

And why  is that so important?

“The bottom line here is that while many companies will be responsible for building out the metaverse, which [CEO Jensen] Huang described as “essentially an overlay of the internet. An overlay of the physical world,” Nvidia is positioning itself to be the brick and mortar of this future digital world.”

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