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Why Nvidia Stock Just Popped

By Rich Smith – Sep 30, 2021 at 11:11AM

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EA just logged on as an Nvidia GeForce NOW partner.

What happened

Shares of semiconductor specialist Nvidia (NVDA -0.98%) -- already one of the biggest names in video games -- got a bit bigger this morning when the company announced it has landed a new partner for its Nvidia GeForce NOW online gaming service.

In today's press release, Nvidia says Electronic Arts (EA -1.11%) will make its "hit games" Battlefield 1 Revolution, Mirror's Edge Catalyst, Unravel Two, Dragon Age: Inquisition, and Apex Legends available on Nvidia's cloud gaming service.

Shares of the chip giant are up 2.2% as of 10:05 a.m. EDT in response.

Excited gamer playing on a PC.

Image source: Getty Images.

So what

This is good news for Nvidia, which last year lost multiple high-profile partners after it declined to strike revenue-sharing deals with them -- and as some of its partners struck out on their own to develop independent online gaming systems. But GeForce NOW seems to have acquired a second life in 2021 as its subscriber number has doubled.  

Today, the company says more than 12 million gamers spend over 20 million hours of gameplay each month on GeForce NOW, playing on servers located in 30 different data centers operating in more than 70 countries. By teaming up with Nvidia in this expansion phase, Electronic Arts is taking advantage of "an opportunity for Electronic Arts to get some of their most beloved franchises into the hands of a rapidly growing global audience instantly," said Jeff Fisher, Nvidia Senior VP for GeForce.

Now what

It's also a pretty big opportunity for Nvidia, which now has a whole new slew of games (and more on the way) with which to attract new customers -- and keep its 12 million existing subscribers from getting bored and wandering off to play games on Alphabet's Stadia service, for example, or Microsoft's xCloud.

Nothing's more dangerous than a bored gamer. Luckily for Nvidia, that shouldn't be a problem now.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Microsoft, and Nvidia. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.

Stocks Mentioned

Nvidia Stock Quote
Nvidia
NVDA
$170.01 (-0.98%) $-1.68
Microsoft Stock Quote
Microsoft
MSFT
$245.42 (-0.80%) $-1.98
Alphabet Stock Quote
Alphabet
GOOGL
$92.83 (-0.94%) $0.88
Electronic Arts Stock Quote
Electronic Arts
EA
$124.71 (-1.11%) $-1.40
Alphabet Stock Quote
Alphabet
GOOG
$93.07 (-0.94%) $0.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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