What happened

As Nvidia's (NVDA -3.33%) Graphics Technology Conference 2022 (GTC 2022) approached its close on Wednesday, investors seemed largely unimpressed with the semiconductor giant's announcements.

Don't get me wrong. Nvidia's promise to enhance its artificial intelligence offerings, create a supercomputer for advanced robotics, expand its virtual reality Omniverse, and so on were all impressive announcements in and of themselves. It's just that they were largely expected, already "priced in" to the stock, and thus failed to convince Wall Street investors to shift their price targets.

That may have changed today, as we watched Nvidia stock jump 5.8% as of 11 a.m. ET.

Semiconductor computer chip with the letters AI in the middle.

Image source: Getty Images.

So what

So what changed today? If you recall from yesterday's article, one of the reasons I mentioned for Wall Street deciding not to raise its price targets on Nvidia was because the company "didn't raise its guidance at all."

Nvidia seems to have heard that loud and clear, however, because as MarketWatch now reports, the company is telling investors it sees "a $1 trillion opportunity" in the several big areas for semiconductor growth that it's targeting.  

Breaking it down, Nvidia sees a total addressable market worth:

  • $300 billion for sales of automotive chips;
  • $300 billion more from sales of other chips and systems;
  • $150 billion from selling artificial intelligence enterprise software;
  • $150 million from Omniverse enterprise software;
  • And $100 billion in annual revenue from video gaming services such as GeForce Now.

Add all that up, and what do you get? A $1 trillion market opportunity for Nvidia.

Now what

Commenting on the news today, an analyst at Evercore ISI called Nvidia's latest estimates "very large numbers," and another at investment bank Bernstein thanked the company for providing a "clearer picture of the broader strategy" going forward. The Bernstein analyst added that now the market is finally "starting to get an inkling of what might be possible as we go down this road" toward a global "Omniverse/Metaverse."  

Admittedly, neither of these two analysts decided to raise their price targets on Nvidia based on today's revelations, either. But the clearer the path becomes for Nvidia to grow from $27 billion in revenue (last year) toward $1 trillion in revenue (at some point in the future), the faster I'd expect Nvidia stock to rise.