An early investor in Amazon and Tesla believes that Nvidia presents a different kind of opportunity, predicting that the AI chipmaker could hit a $50 trillion valuation within the next decade.
James Anderson, a former fund manager at Baillie Gifford, shared his thoughts with The Financial Times, highlighting Nvidia’s “persistent exponential progress, competitive advantages in hardware and software, and strong culture and leadership.” Anderson currently manages a $650 million fund, with Nvidia being its largest holding.
He mentioned that the potential scale for Nvidia, in an optimistic scenario, is unprecedented and could lead to a market cap in the double-digit trillions. While this isn’t a prediction, it is a possibility if artificial intelligence proves advantageous for customers and Nvidia maintains its lead.
In a letter to investors this year, Anderson estimated a 10% to 15% chance of Nvidia reaching a $49 trillion market cap within a decade, driven by growth in data center demand. He emphasized the importance of the extended development period for GPU usage in AI, which he believes will transform various industries.
Anderson contrasted Nvidia with Amazon and Tesla, noting that unlike those companies, Nvidia started from a highly profitable and dominant position.
Amid the generative AI boom, Nvidia’s in-demand chips have significantly boosted the company’s revenue and market value. In February, Nvidia became the first semiconductor company to achieve a $2 trillion valuation after reporting record fourth-quarter earnings. By June, Nvidia briefly reached a $3 trillion market cap, surpassing Microsoft and Apple to become the most valuable company in the world.
Nvidia’s shares have surged nearly 167% this year.