Nvidia (NASDAQ:NVDA) reminds investors that it's more than just a chip stock

Nvidia (NVDA) wanted to remind investors that it is more than just a hardware company that makes chips. In fact, the company unveiled its expanding range of AI software platforms at its AI Summit in Washington, DC today. Nvidia's software, such as NIM Agent Blueprints and NeMo, is used by companies such as AT&T (T) and research centers such as the National Cancer Institute to create custom AI models and chatbots, and to assist in tasks such as drug development and space radio wave analysis.

These tools help Nvidia create new revenue streams beyond hardware sales. In fact, software perfectly complements the company's hardware segment as it provides recurring revenue opportunities. It also helps Nvidia stand out from its competitors, who are undoubtedly working hard to create products that match Nvidia's capabilities and could ultimately undercut Nvidia's prices.

By focusing on its software ecosystem, the company aims to retain its customers for the long term, similar to what Apple (AAPL) has done with its services. And as Nvidia's network continues to grow, it will attract more developers, helping Nvidia maintain its leadership position in the AI ​​market. All of this excited investors today, sending the stock up over 3% at the time of writing.

The AI ​​software market is expected to grow significantly

Adding a software component to a company that primarily sells hardware products is a solid catalyst in itself. However, given that Nvidia is eyeing the AI ​​software market, the growth potential seems all the more interesting. The market for artificial intelligence is expected to grow by 36.6% annually from 2024 to 2030 and ultimately reach a total value of 1.8 trillion US dollars Grand View Research.

Given these growth prospects, it's no wonder that 21% of all portfolios tracked by TipRanks hold NVDA stocks, with an average portfolio weight of 13.3%. However, it is worth noting that sentiment has recently turned negative as 0.9% of these investors have reduced their holdings.

Is NVDA Stock a Buy?

As for Wall Street, analysts have a Strong Buy consensus rating for NVDA stock based on 39 Buys, three Holds, and zero Sells over the last three months, as shown in the chart below. After a 192% increase in share price over the past year, NVDA's average price target of $152.44 per share implies an upside potential of nearly 15%.

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