Nasdaq NVDA Nvidia

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If Nvidia's (NASDAQ: NVDA) high valuation has kept you from investing in the chipmaker, you're not alone. In this segment of Backstage Pass, recorded on Nov. 17, Fool contributors Rachel Warren, Connor Allen, and Travis Hoium discuss a couple of ways you can watch stocks you're i

Nvidia (NVDA) designs and manufactures graphics processing units (GPUs) and microprocessors for computing platforms, including high-end gaming PCs. I am bullish on NVDA stock. (See Analysts’ Top Stocks on TipRanks)

Over the years, Nvidia has blossomed into a computing hardware powerhouse. From gaming PCs to autonomous vehicles, oftentimes, you'll find that Nvidia's components are powering the world's devices.

Admittedly, Nvidia pays a minuscule dividend yield, and the company's trailing 12-month price-to-earnings ratio of 84.2 might bother some value investors.

Still, when we check the data, it's evident that Nvidia is firing on all cylinders. Therefore, NVDA stock could be considered a bargain at almost any price point.

A Leader in Accelerating Computing

Nvidia once had a reputation for just making GPUs (graphics processing units) for high-powered gaming consoles. However, the company has expanded its business model in recent years.

Nowadays, Nvidia claims to be a world leader in accelerated computing. To back this claim up, the company reported strong revenue growth in not just one but four different segments.

The most impressive revenue growth came from Nvidia's Professional Visualization segment, at 97% from Fiscal Year 2021 to Fiscal Year 2022. In other words, Nvidia nearly doubled this segment's revenues in just a year.

In that same time frame, Nvidia increased its revenues for Gaming by 72%, Data Center (including cloud and artificial intelligence) by 53%, and Automotive (including autonomous vehicles) by 13%.

The skeptics might say that Nvidia has some catching up to do when it comes to its automotive business. Indeed, there's room for improvement, and the shareholders should keep an eye out for developments in this part of Nvidia's business.

Building 3D Worlds

If you thought that Nvidia would get left behind in the build-out of the metaverse, think again.

Not long ago, Nvidia released a set of tools for software developers to help them create the 3D virtual worlds that inhabit the metaverse.

At the company's annual technology conference, it released Omniverse Enterprise. This suite of tools can help apps used to create three-dimensional worlds work better together while running on chips made by Nvidia.

This product will start at $9,000 per year. So, it's easy to envision Nvidia earning a vast revenue stream from Omniverse Enterprise.

Using a colorful metaphor, Richard Kerris, vice president of the Omniverse platform at Nvidia, called the product "the plumbing of the virtual worlds."

Furthermore, Kerris declared that Nvidia worked with more than 700 companies to test and develop the software.

Wall Street's Take

Turning to Wall Street, Nvidia has a Strong Buy consensus rating, based on 24 Buys and two Holds assigned in the past three months. The average Nvidia price target is $360.17, implying 31.9% upside potential.

The Takeaway

Nvidia is still a premier gaming chipmaker - make no mistake about that.

At the same time, the company is branching out into multiple business segments, including the metaverse.

That's bullish for NVDA stock and suggests that it's a great value even when the share price seems elevated.

Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article. ​

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

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InvestorPlace - Stock Market News, Stock Advice & Trading Tips

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