An early investor in Amazon and Tesla believes Nvidia presents a unique investment opportunity and suggests the AI chipmaker could achieve a $50 trillion valuation within a decade.
James Anderson, a former fund manager at Baillie Gifford, shared his thoughts in an interview with The Financial Times. He highlighted Nvidia’s “persistent exponential progress, the competitive advantages in hardware and software, and the culture and leadership” as key factors making the company an attractive investment. Anderson currently manages a $650 million fund, with Nvidia as its largest holding.
“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.”
In a letter to investors earlier this year, Anderson estimated a 10% to 15% probability of Nvidia reaching a market cap of $49 trillion within the next decade, driven by increased demand in data centers. He emphasized the importance of “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 noted that Nvidia stands apart from his previous investments in Amazon and Tesla because those companies did not start from highly profitable and dominant positions but had to reach that status over time.
Nvidia’s high-demand chips, which are crucial for training advanced AI models, have significantly boosted the company’s revenue and market value amid the generative AI surge. In February, Nvidia became the first semiconductor company to hit a $2 trillion valuation after reporting record fourth-quarter earnings. The company briefly surpassed a $3 trillion market cap in June, overtaking both Microsoft and Apple to become the world’s most valuable company.
So far this year, Nvidia’s shares have increased by almost 167%.