Tech giant Nvidia bets on metaverse hopes for upbeat revenue forecasts

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Nvidia Corp has reportedly forecast that the revenue for the fourth quarter would exceeds analysts' expectations. The company is apparently betting on its growing data center business as more internet companies are inclined on investing in artificial intelligence and the metaverse.

The online realm that utilizes virtual and augmented reality to facilitate user interaction has gained huge traction after Facebook (now Meta), announced that it would augment its capital expenditure and shift focus from its social media business.

The move is expected to make a significant contribution to Nvidia’s growth, as metaverse applications would require more computing power which will subsequently fuel the chip demand.

Last month, the company had reportedly unveiled Omniverse Enterprise, a range of software solutions that will enable the companies to collaborate to build virtual worlds.

Speaking on the matter, Chief Executive of Nvidia Jensen Huang stated that he believes the company could eventually generate around $1,000 annually from about 40 million virtual world designers and creators. According to Nvidia, nearly half its Omniverse revenue will come from chips and another half from software.

The company is expecting $7.40 billion of current-quarter revenue, plus or minus 2%, above the average estimate of $6.86 billion made by the analysts. Reportedly, its shares increased to nearly 4% in extended trading, after more than doubling this year.

Nvidia is known to have prevented major supply chain issues amid the global chip shortage. However, supply chain costs are increasing. The company stated that the long-term supply obligations and outstanding inventory purchases accounted for $6.90 billion, increasing by $2.57 billion a year before. It has reportedly made a payment of $1.6 billion in the third quarter alone for securing supply.

Sources have reported that the overall revenue of the company increased to about 50% to $7.10 billion for the three months ended October 31, over the average estimate of $6.83 billion.

Source credit: https://cio.economictimes.indiatimes.com/news/corporate-news/nvidia-forecasts-upbeat-revenue-on-metaverse-hopes/87771032