An early investor in Amazon and Tesla believes Nvidia could reach a $50 trillion valuation within the next decade. James Anderson, a former fund manager at Baillie Gifford, shared with The Financial Times that Nvidia’s consistent exponential progress, hardware and software competitive advantages, and strong culture and leadership align with his investment criteria. Anderson, who manages a $650 million fund with Nvidia as its largest position, stated that the potential scale of Nvidia could lead to a market cap in the double-digit trillions if artificial intelligence succeeds and Nvidia maintains its lead.
In a letter to investors this year, Anderson mentioned a 10% to 15% probability of Nvidia hitting a $49 trillion market cap in a decade, driven by growth in data center demand. He emphasized the significance of ongoing developments in GPU usage in AI, projecting industry transformations beyond initial excitement and potential pauses.
Anderson also pointed out that Nvidia differs from his investments in Amazon and Tesla, noting these companies did not start from highly profitable and dominant positions.
Nvidia’s highly sought-after chips, essential for training powerful AI models, have significantly boosted the company’s revenue and market value during the generative AI boom. In February, Nvidia became the first semiconductor company to reach a $2 trillion valuation after reporting record fourth-quarter earnings. The company crossed the $3 trillion market cap threshold in June, briefly surpassing both Microsoft and Apple to become the world’s most valuable company. Nvidia’s shares have surged nearly 167% this year.