Nvidia Leverages AI and Metaverse Amid Dwindling Crypto Mining Demand

Despite a decline in semiconductor sales related to ether mining, Nvidia’s Q1 report on Wednesday is expected to reveal a strong performance fueled by investments in AI and metaverse offerings, according to the Forbes.

The chipmaker remains a dominant force in the semiconductor sector, particularly in generative AI. According to KeyBanc Capital Markets, Nvidia is well-positioned with its new product cycles in data-center and gaming divisions, and its Omniverse platform for 3D metaverse applications, which offers a promising software subscription revenue stream.

The market consensus from KeyBank reiterated an Overweight rating for Nvidia’s stock, increasing the price target to $375 from $320. Shares were trading around $308 on Tuesday afternoon.

Analysts at Wedbush Securities also anticipate a positive trend for Nvidia, bolstered by a robust AI demand, suggesting that there’s no immediate hurdle for the stock.

Despite the projected Q1 sales decline from $8.3 billion a year ago to $6.5 billion, and a decrease in EPS from $1.11 to 92 cents, Nvidia’s strategic shift seems to be bearing fruit. The decrease mainly stems from the Ethereum network’s move to an energy-efficient model, causing Nvidia’s graphic processing units sales to dip.

However, with OpenAI’s ChatGPT sparking an AI boom and the U.S. ban on AI chip sales to China, demand for Nvidia’s AI GPUs has surged. The company’s collaboration with Microsoft on Azure to bring AI, simulation, and collaboration capabilities to every industry further underlines their optimistic trajectory.