Nvidia is leading the pack in the semiconductor momentum trade. It was the best semiconductor name in 2015, and while I’m uncertain of it becoming number 1 in 2016, I still think the thesis around the stock has changed quite considerably over the years. The smart money is buying this name in droves because the stock’s underlying growth characteristics have shifted away from the PC OEM business to selling direct to consumer via third party retail channels like Amazon and Newegg. Furthermore, ASPs within the add-in-board space increased as a result of intensive graphics applications like VR. I talked to a close technology expert who knows the industry, and he confirmed that VR headsets sold out within the first 30 minutes. Demand is high for this peripheral device, so maybe Facebook was right to pay $2B for Oculus. After all VR is the next frontier and an incremental 1-4 million GTX 970 units adds $300 million to $1.2 billion in incremental sales in the upcoming refresh cycle. We also know that the company is releasing its new GPU line-up in the next several months and it will target 4K gaming, which is high in demand as gaming is the one place where there’s ample support for the higher resolution. These factors imply that Nvidia is positioned well enough to blow it out of the ball park this year. I’ll share an updated forecast in future articles. Source: FreeeStockCharts We got additional insights from RBC Capital Markets this morning, as they released a CES themed report with their personal findings from interviewing Nvidia's CFO:The newly announced Drive PX 2 should reduce development time by 30x (development that would take a month, will now be done in a single day), 2) Nvidia's 970 product line is the lowest tier product needed for virtual reality and 3) less than 1% of the current consumer PC install base can support virtual reality. Net Net: we came away incrementally more positive on near-term trends on both the automotive and VR market opportunity. RBC’s coverage on NVDA is excellent, and they’re also extremely conservative. In other words, because the estimate by the consensus is that much more conservative than RBC a blowout seems probable over the next 12-months.They’re forecasting EPS of $1.58 for FY’17, which is well above the consensus estimate at $1.36 for FY'17. In other words, I still think there’s more upside to earnings than what RBC is anticipating, and way more than what the analyst consensus is anticipating. With a series of beats highly probable, and the stock selling at a slight discount from recent highs, I think traders/managers/investors have to consider NVDA. It's a conviction buy. I’m pounding the table on this one.