An early investor in Amazon and Tesla stated that Nvidia represents a different type of investment and could potentially reach a valuation of $50 trillion within a decade.
James Anderson, a former fund manager at Baillie Gifford, told The Financial Times that Nvidia’s ongoing exponential progress, competitive advantages in hardware and software, and strong culture and leadership align perfectly with what he looks for in a company. Anderson manages a $650 million fund where Nvidia holds the largest position.
According to Anderson, if artificial intelligence proves beneficial for customers and Nvidia maintains its lead, the company’s potential scale in the most optimistic scenario could result in a market cap of double-digit trillions. He notes that this is not a prediction but a possibility.
In a letter to investors this year, Anderson indicated there is a 10% to 15% probability that Nvidia could achieve a market cap of $49 trillion over the next decade, driven by growth in data center demand. He emphasized the importance of the prolonged development of GPU usage in AI, from initial excitement through potential pauses to industry transformation.
Anderson distinguished Nvidia from Amazon and Tesla by highlighting that those companies did not start from highly profitable and dominant positions but had to build up to them.
Nvidia’s high-demand chips, essential for training some of the world’s most powerful AI models, have significantly boosted the company’s revenue and market value amidst the generative AI boom. In February, Nvidia became the first semiconductor company to achieve a $2 trillion valuation after reporting record fourth-quarter earnings. In June, Nvidia briefly reached a market cap of $3 trillion, surpassing both Microsoft and Apple to become the most valuable company globally.
The chipmaker’s shares have surged nearly 167% this year.