Microsoft Corp. recently stunned Wall Street by announcing a whopping $75 billion purchase of gaming leader Activision Blizzard Inc.
See, a big part of the move is to help Microsoft gain a greater foothold in the burgeoning Metaverse that will be filled with immersive 3D worlds.
It all goes to prove what we talked about back on November [13] – Microsoft is a great way to invest in the Metaverse because it has the right software that includes advanced gaming engines.
Here’s the thing. Microsoft counts one of the world’s great graphics processing companies as a key partner who I really want you to consider.
Simply stated, Microsoft’s dazzling graphics wouldn’t be nearly as immersive without this firm’s technology.
Let me show you why this Silicon Valley legend is set to double its earnings in as little as two years…
Supporting the tech industry
NVIDIA Corp. (NVDA) is the company I am talking about. Now, Nvidia got its start making graphics chips – or Graphical Processing Units (GPUs) as they’re called – for PCs.
Nvidia is what’s allowed the near-realistic graphics PC and console players get today – and which will be crucial to the Metaverse as well. And to this day, Nvidia holds the GPU performance crown and more than 80% of the market share.
But there’s so much more going on here than just gaming and the Metaverse.
See, to process video graphics, GPUs have to be designed to perform many calculations in parallel, over and over again. That’s also what a chip needs to power advanced AI, machine learning, and many other fast-growing technologies.
For example, Nvidia’s conversational AI platform can automatically recognize speech, understand natural spoken language, and fluidly read text out loud without sounding like a stereotypical robot.
The platform’s AI can do all this while reacting within milliseconds, without sacrificing accuracy.
It’s something a regular processor would be hard-pressed to do. But Nvidia’s GPU-based designs make short work of these AI tasks.
None of that would be possible without Nvidia’s heavy emphasis on machine-learning chips. In fact, the company’s conversational AI models are “trained” using machine learning for 100,000 hours before being presented to clients, and they all run on Nvidia’s own DGX AI chips.
Demands of Gamers
Now then, some of you may be a bit doubtful about the impact a computer gaming company such as Activision can have on the wider world around us.
But because gamers are so demanding about their experiences, gaming firms often lead the rest of the tech sector in adopting AI and VR, just to name a couple.
That’s why so many analysts now say that much of the technology supporting the Metaverse is coming to us courtesy of the gaming world.
The Metaverse, as you’ll recall, is the fusion of 3D virtual worlds with the real one.
The idea is to allow us to seamlessly make use of, see information and even other people’s digital avatars in the real world. You’ll be able to shop, spend time with friends, and even work online in fully realized 3D virtual worlds.
Compared to the current Internet, which is 2D and split up between different websites, the Metaverse will focus much more on social aspects.
And since we’re talking about Microsoft here, you can bet its approach to the Metaverse will include a healthy dose of benefits for businesses.
At a very minimum, we’re talking about how to allow teams to work together in the Metaverse, or how to make online work meetings easier and far more natural than anything you see in either Zoom or Skype.
Elon Musk needs this company’s support
Another huge market for Nvidia’s AI chips are electric vehicles (EVs) and autonomous vehicles. This new breed of car is using automation and sensors to become safer, help the driver, and even become autonomous.
Of course, that requires working with lots of different streams of data from multiple sensors to predict what other cars, the road, and even the driver are about to do.
That’s exactly where AI and GPU-based chips shine, and Nvidia’s leadership here has not gone unnoticed among carmakers. Tesla Inc.’s (TSLA) early work on automating their EVs was done on Nvidia chips, and the Tesla Autopilot 2.0 and 2.5 run on Nvidia’s DRIVE PX platform.
Given this emphasis on AI and graphics, moving into the Metaverse market was a no-brainer for Nvidia.
Combine the real world with the virtual world
Now, Nvidia prefers the term “Omniverse,” but the end result is the same – Nvidia is working proactively to become the leader in Metaverse hardware.
Most importantly, Nvidia CEO Jensen Huang recently announced the Nvidia Replicator service, which allows programmers using Nvidia chips to mix data from virtual worlds and the real world.
That’s currently very hard to do but is crucial to achieving the seamless mix of physical and digital that the Metaverse will require.
And reap the rewards, especially for investors. Nvidia has been growing its earnings per share by 39% a year, meaning they double roughly every two years with stock price likely to follow.
That’s a powerful value proposition going into the disruptive Metaverse world.
To be sure, Nvidia has sold off recently with much of the tech world.
But to my mind, there’s no doubt this is a great tech stock to own for the long haul.
So, at the very least, this winner should be high on your watchlist.
Cheers and good investing,
— Michael A. Robinson
Source: Strategic Tech Investor