CEO Jensen Huang shared that the next generation of computer graphics needs to improve three essential components for more realistic graphics: reflections, shadows, and refraction. The next-gen Nvidia RTX platform combines ray tracing and AI to do so. Despite Nvidia being well-positioned to lead the next-generation of computer graphics, there are two short-term hurdles that the company needs to overcome: 1) As outlined above, Nvidia needs to clean up its gaming channel inventory. 2) More developers need to utilize ray tracing technology. EA’s Battlefield V and upcoming Anthem were highlighted in the keynote as two examples, but in all, there are fewer than 15 games which will support ray tracing in the near future. In order for gamers to have an incentive to upgrade, more developers need to integrate ray tracing into their titles.
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Nvidia now looks like a very compelling investing opportunity, as TipRanks analytics showcasing the stock as a Buy. With an average price target of $228.81, analysts are predicting massive upside potential of nearly 70%. In total, NVDA stock has received 22 ‘buy’ ratings vs. 8 ‘hold’ rating in the last three months. (See NVDA’s price targets and analyst ratings on TipRanks)