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Nvidia's rally turbo charged by 'metaverse', valuation breaches $800 billion

Nvidia's rally turbo charged by 'metaverse', valuation breaches $800 billion
Nvidia's rally turbo charged by 'metaverse', valuation breaches $800 billion   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Siddarth S and Akash Sriram</p> <p> – Shares of Nvidia Corp surged 12% on Thursday, taking the chipmaker closer to the $1 trillion valuation mark on hopes that it will get a boost from companies plowing billions of dollars into their “metaverses”, the latest technology buzzword.</p> <p>The company’s stock has been on a tear, especially after Meta Platforms, formerly Facebook, announced plans late in October to rebrand itself in a bid to build a metaverse around its widely used platforms.</p> <p>Nvidia on Wednesday forecast upbeat fourth-quarter results, betting on growth in its business that supplies chips to power artificial intelligence and the metaverse.</p> <p>It shares have more than doubled this year and breached the $800 billion valuation mark on Thursday, far outpacing those of rivals Intel and Advanced Micro Devices, which have risen 0.82% and 65%, respectively.</p> <p>Some analysts, however, remain cautious over the high valuation as Nvidia cements its position as the seventh most valuable U.S. company.</p> <p>“Valuation will be the other potentially sticky factor, with the shares admittedly trading at eye-watering levels,” said Bernstein analyst Stacy Rasgon.</p> <p>RoundHill Ball Metaverse <span class="caps">ETF</span>, which tracks companies that benefit from metaverse, rose 1.7% to hit a record high.</p> <p>With Nvidia its largest holding, the <span class="caps">ETF</span> has risen more than 20% since hitting a low on Oct. 4.</p> <p>The company last month released Omniverse Enterprise, a set of software tools that will help companies create a “metaverse” of three-dimensional virtual worlds, the computing power for which would come from Nvidia’s chips.</p> <p>Its executives have been drumming up the concept and used the term “omniverse” 36 times on Wednesday’s post-earnings call, a big jump from the 20 and seven references in the August and May calls, respectively.</p> <p>“Nvidia’s comments reinforced our positive thesis on the company’s positioning/strategy to become an enabling platform story for the metaverse,” Wells Fargo analysts said.</p> <p/> </div>