An early investor in Amazon and Tesla noted that Nvidia represents a unique investment opportunity, predicting that the AI chipmaker could achieve a valuation of $50 trillion within a decade.
James Anderson, a former fund manager at Baillie Gifford, told The Financial Times that Nvidia’s continuous exponential progress, its competitive edge in hardware and software, and its organizational culture and leadership align with his investment criteria. Anderson manages a $650 million fund where Nvidia stands as the largest holding.
According to Anderson, Nvidia’s potential scale in an optimistic scenario could lead to a market cap in the double-digit trillions. He clarified that this is not a guaranteed prediction but a possibility if artificial intelligence proves beneficial for customers and Nvidia maintains its lead.
In a letter to investors this year, Anderson reportedly stated there is a 10% to 15% chance that Nvidia could achieve a market cap of $49 trillion within ten years due to rising data center demand. He emphasized the importance of the long-term development of GPU usage in AI, highlighting its transformative potential across various industries.
Anderson pointed out that Nvidia differs from his investments in Amazon and Tesla because those companies did not start from highly profitable and dominant positions but had to build towards that.
Nvidia’s chips, crucial for training some of the world’s leading AI models, have fueled the company’s revenue and market value amid the surge in generative AI. In February, Nvidia became the first semiconductor company to reach a $2 trillion valuation after announcing record fourth-quarter earnings. The company briefly reached a $3 trillion market cap in June, surpassing Microsoft and Apple to become the most valuable company globally.
Nvidia’s shares have risen nearly 167% this year.