Nvidia (NASDAQ:NVDA) has been enjoying an excellent month, with NVDA stock up more than 7%. The new artificial intelligence (AI) boom has trigged a rush on tech companies in the space. But today, the dynamic tech company known for semiconductors announcing an exciting new partnership with an industry giant.
Over the next ten years, it will be working with Microsoft (NASDAQ:MSFT) to help the PC producer expand its gaming empire. Under the agreement, Xbox PC games will be featured on Nvidia’s GeForce Now cloud gaming platform.
NVDA stock is struggling today following news that famed investor Cathie Wood may be giving up on it. However, this development may be the catalyst it needs to rebound, pushing MSFT stock into the green as well.
Let’s take a closer look at what investors need to know about the gaming sector’s new deal.
What’s Happening With NVDA Stock
It’s not hard to see why this partnership could be an excellent growth driver for both MSFT and NVDA stock. Nvidia’s platform has more than 25 million users worldwide with a base that spans over 100 countries. That audience would likely be happy to have easy access to XBox’s popular array of games. Per a statement released by the company:
“The agreement will enable gamers to stream Xbox PC titles from GeForce NOW to PCs, macOS, Chromebooks, smartphones and other devices. It will also enable Activision Blizzard PC titles, such as Call of Duty, to be streamed on GeForce NOW after Microsoft’s acquisition of Activision closes.”
When we factor in that library of Microsoft-made devices, it becomes clear how vast the opportunities for both companies are. Data indicate the cloud-gaming market is expected to continue expanding significantly, rising at a compound annual growth rate (CAGR) of 45.2% between now and 2028.
This means over the next five years, Nvidia will be able to ride both the AI and gaming waves directly to the top, taking its place among the tech sector’s leading names. NVDA stock is uniquely positioned to offer investors exposure to two lucrative industries.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
