Nvidia's Potential $50 Trillion Market Cap: A Tech Investor's Bold Prediction

Can Nvidia really hit $50 trillion market cap like this tech investor suggests? By Investing.com

According to a report by the Financial Times on Tuesday, one of the most successful tech investors said Nvidia (NASDAQ:NVDA) could be worth almost $50 trillion in a decade. The number represents more than the combined current market value of the entire S&P 500. However, the publication reported James Anderson, well-known for his early bets on companies such as Tesla (NASDAQ:TSLA) and Amazon (NASDAQ:AMZN), as saying that "the potential scale of Nvidia in the most optimistic outcome is both way higher than I've ever seen before and could lead to a market cap of double-digit trillions." "This isn't a prediction but a possibility if artificial intelligence works for customers and Nvidia's lead is intact," he reportedly added. Nvidia has been a primary beneficiary of the surge in chip demand following the emergence of generative AI. Its shares have surged over 175% in the last 12 months, pushing its market capitalization above the $3 trillion mark. Anderson, who recently teamed up with the holding company of Italy's Agnelli family to launch Lingotto Investment Management, said Nvidia's "persistent exponential progress, the competitive advantages in hardware and software, and the culture and leadership are exactly what we look for." When assessing the difference between Nvidia and some of his previous successful tech bets Anderson notes: "Amazon, Tesla etc didn't start from highly profitable and dominant positions but had to get there". He explained that the real growth in data center AI chip demand looked to be running at about 60% per year. When assessing the next decade, he stated that 10 years of 60% growth in data center revenue alone, with unchanged margins, would result in earnings of $1,350 per share and free cash flow of approximately $1,000 a share. The FT said Anderson remarked that an Nvidia share might be worth $20,000 in 10 years, translating to a market capitalization of $49 trillion. Anderson assigned the probability of this type of outcome at 10% to 15%. He added: "It is the long duration of the development of GPU usage in AI -- and not just AI -- from excitement, through potential pauses, to transformation of industries that is most important to us." Anderson believes the route to the extremely lofty valuation will likely be volatile, and it would not be surprising if the chipmaker had one or more significant drawdowns.

Get ready for Nvidia's market cap to soar to $50 trillion, top investor says

James Anderson, a former fund manager at Baillie Gifford, told The Financial Times that Nvidia's "persistent exponential progress, the competitive advantages in hardware and software, and the culture and leadership are exactly what we look for." Anderson runs a $650 million fund that counts Nvidia as its largest position. "The potential scale of Nvidia in the most optimistic outcome is both way higher than I've ever seen before and could lead to a market cap of double-digit trillions," Anderson told The FT. "This isn't a prediction but a possibility if artificial intelligence works for customers and Nvidia's lead is intact." Anderson reportedly wrote in a letter to investors this year that the probability of Nvidia reaching a market cap of $49 trillion in a decade due to growth in data center demand is 10% to 15%. He added that what he finds important is "the long duration of the development of GPU usage in AI -- and not just AI -- from excitement, through potential pauses, to transformation of industries." Anderson told The FT that Nvidia is different from his bets on Amazon and Tesla because those companies "didn't start from highly profitable and dominant positions but had to get there." Nvidia's highly in-demand chips, which are used for training some of the world's most powerful AI models, have propelled the company's revenue and market value amid the generative AI boom. In February, Nvidia became the first semiconductor company to reach a $2 trillion valuation. after it reported record fourth-quarter earnings. Nvidia reached the $3 trillion market cap threshold for the first time in June, briefly surpassing both Microsoft and Apple to become the most valuable company in the world. The chipmaker's shares are up almost 167% so far this year.

NVIDIA Might Be Worth $50 Trillion By The Next Decade, Estimates Early Tesla & Amazon Investor

NVIDIA could very well be worth $50 trillion in a decade, claims Tesla and Amazon's early investor James Anderson, saying that the AI wave will ride Team Green to new levels. The estimate by Anderson does look odd when you consider modern-day factors, but overall, the prediction isn't that far-fetched, seeing how NVIDIA has managed to witness almost a whopping 10x in market cap within two years, simply due to the AI hype. Team Green has established a monopoly over the markets, and every other mainstream tech company is acquiring mind-boggling amounts of AI hardware from the firm, whether it is AI accelerators or large-scale clusters. The potential scale of Nvidia in the most optimistic outcome is both way higher than I've ever seen before and could lead to a market cap of double-digit trillions. This isn't a prediction but a possibility if artificial intelligence works for customers and Nvidia's lead is intact. - James Anderson, The Financial Times Anderson currently runs the Lingotto Investment Management fund, worth $650 million, and he believes that if the AI hype continues at this pace, NVIDIA is very well set to witness almost a 1500% increase in market cap over the decade, putting the firm's valuation higher than the entire S&P 500 today. Estimates say that right now, the global liquidity stands at $82.6 trillion; hence, imaging NVIDIA's predicted market cap in the modern-day is almost impossible, but the estimate by Anderson isn't odd at all, and here's why. Firstly, NVIDIA is the sole "mainstream" supplier of the AI industry, and by the mainstream, we mean the most dominating. Team Green's AI portfolio is desired by every company out there, and the demand is out of the roof. Especially with the expected debut of the Blackwell generation, NVIDIA is set to clock in over one million orders for its Blackwell AI GPUs, racking up $35 billion just from GPU sales alone. If you account for the demand for the company's AI servers, such as the GB200, Team Green's expected revenue for this year could very well cross the $100 billion mark, too, from one product generation only. Now, if you talk about the sustainability of the AI hype and the argument that it's just another "dotcom" bubble, the capabilities AI brings into the modern day are entirely different. Artificial intelligence has fueled the growth of automation in the industry, which is a sector worth $50 trillion, according to NVIDIA's CEO Jensen Huang. Generative AI and AGI have opened new doorways for consumers when it comes to visualizing and implementing certain concepts, and as Jensen says, AI is here to stay. It's important to note that our coverage isn't financial advice at all; rather, it discusses market prospects in general. There have been bearish estimates surrounding NVIDIA, particularly from the likes of Cathie Wood, CEO of ARK Invest, so it is inconclusive to say how Team Green will perform ten years from now on. Given the AI hype stays in the market and NVIDIA continues to maintain its "presumed" monopoly, we are looking at a grand slam.

What's Going On With Nvidia Stock On Tuesday? - NVIDIA (NASDAQ:NVDA)

Tech investor James Anderson predicts Nvidia could reach a $50 trillion market cap in the next decade, reflecting high growth expectations. Artificial intelligence chip stock Nvidia Corp NVDA saw a continued rally in 2024 as the AI frenzy is in no mood to slow down. The stock surged 167% year-to-date. Tech investor James Anderson expects Nvidia to reach a market cap of $50 trillion within the next ten years. However, in the second quarter, Nvidia saw DNB Asset Management make significant adjustments to its U.S.-traded big tech holdings. DNB trimmed its holdings of Nvidia, despite the stock's strong performance, while increasing its positions in Apple Inc AAPL and Tesla Inc TSLA, which had been underperforming in the market, Barron's reports. Additionally, DNB more than doubled its stake in Intel Corp INTC. DNB manages around $88 billion in assets. DNB's stake adjustment coincided with reports of the French competition authority investigating Nvidia for alleged anti-competitive practices. Benoit Coeure, the agency's president, told Reuters during a press briefing that Nvidia could face charges pending the outcome of the investigation. Nvidia has faced skepticism from New York University Stern School of Business Professor Aswath Damodoran over recent months, with the professor repeatedly calling the stock overvalued. In March, he reflected on past predictions that didn't pan out, suggesting either a misunderstanding on his part or by the market. Despite Nvidia's leading role in AI, Damodoran cautioned that achieving profitability might be more complex than believed. Investors can gain exposure to Nvidia through Vanguard Information Tech ETF VGT and iShares S&P 500 Growth ETF IVW. Price Actions: NVDA shares traded higher by 0.02% at $128.46 premarket at the last check on Tuesday. Photo via Wikimedia Commons Market News and Data brought to you by Benzinga APIs