An early investor in Amazon and Tesla has described Nvidia as a unique opportunity, suggesting that the AI chipmaker could achieve a $50 trillion valuation within a decade.
James Anderson, a former fund manager at Baillie Gifford, expressed to The Financial Times that Nvidia’s consistent exponential growth, along with its competitive hardware and software advantages, and strong leadership, make it highly promising. Anderson manages a $650 million fund where Nvidia holds the largest position.
Anderson commented, “The potential scale of Nvidia in the most optimistic scenario is far beyond anything I’ve seen before, with its market cap possibly reaching double-digit trillions. While this isn’t a prediction, it remains a possibility if artificial intelligence benefits customers and Nvidia maintains its lead.”
In a letter to investors this year, Anderson mentioned a 10% to 15% probability that Nvidia could attain a $49 trillion market cap in a decade, driven by increased data center demand. He emphasized the significant duration of GPU usage development in AI, which could transform industries over time.
Anderson noted that Nvidia differs from his investments in Amazon and Tesla, as those companies didn’t start from highly profitable and dominant positions but had to reach that status.
Nvidia’s highly sought-after chips, essential for training advanced AI models, have significantly boosted the company’s revenue and market value amidst the AI surge. In February, Nvidia became the first semiconductor company to achieve a $2 trillion valuation after reporting record fourth-quarter earnings. The company briefly exceeded a $3 trillion market cap for the first time in June, surpassing both Microsoft and Apple to become the world’s most valuable company.
Nvidia’s shares have risen nearly 167% this year.