$NVDA Nvidia's trump card is software
Nvidia has made a big push into software, which not only expands its addressable market opportunity but, most importantly, further solidifies its competitive advantage. It's been supplying free software downloads for years for its gaming GPUs, but selling software services to enterprises could become the company's main growth driver.
Investors see major opportunities for Nvidia's AI Enterprise software (e.g., training AI models) and Omniverse Enterprise for metaverse applications. Once customers buy Nvidia hardware and install software on top, it creates a tighter client relationship.
Nvidia sells these software applications as an annual subscription or a licensing fee. It's early in this opportunity, but management sees the addressable market for its software reaching $150 billion. That might seem like overselling the opportunity, but when considering that an annual subscription for Nvidia AI Enterprise can cost thousands of dollars per chip socket, not just per customer, the annual sales opportunity adds up quickly.