Nvidia’s rise has been astronomical – its market capitalization has grown from $1.1 trillion to $3.1 trillion in the span of three hundred and sixty-five days – and one tech investor who predicted the early fortunes of Amazon and Tesla said this is only the beginning. .
Thank you for reading this post, don't forget to subscribe!James Anderson, former husband of funding giant Baillie Gifford, said, “Nvidia’s potential scale in the most optimistic outcome I’ve ever seen could lead to a market capitalization in the double-digit trillions.” monetary example, “This is not a prediction but a possibility if artificial intelligence works for customers and Nvidia’s lead remains intact.”
The chip maker behind OpenAI’s ChatGPT has surged thanks to AI growth, which has given rise to nearly 1,000,000 new millionaires who have invested in the technology that has begun to revolutionize the fields of business and media penetration. Together with tech giants Amazon, Google, Microsoft and Apple, Nvidia is worth $14.5 trillion and makes up about 32% of the S&P 500. With the AI darling’s knowledge center revenue growing nearly 60%, Anderson calculated, this trend should continue over the next decade, with the company’s market capitalization reaching nearly $49 trillion. This is more than the entire value of every company in the S&P 500, which is approximately $45.84 trillion. Anderson estimated a ten%–15% probability of this final outcome.
Anderson’s projection is brilliant, but his predictions have been proven correct before. With a go big or go home mentality, he was one of Amazon and Tesla’s greatest champions (for the EV giant, Anderson’s investment was the second best only to CEO Elon Musk). From 2005 to 2021, the Scottish Loan Funding Acceptance, controlled by Baillie Gifford, saw returns of 2,240%. It invested in Nvidia in 2016. Lingotto Investment Control, where Anderson is now an investor, has made a $650 million investment with Nvidia, its largest company.
He said that when Anderson first started investing in the company, Nvidia had no particular path to fortune. It remains to be found out whether it could be gaming, crypto or AI corporate. However, it had a good deal of early luck, unlike Amazon and Tesla, which “did not start from highly profitable and dominant positions, but had to get there.” In many ways, Anderson nevertheless sees Nvidia as an agile corporate.
“It’s the long period of evolution of the use of (graphics processing units) in AI – and not just AI – from excitement, through potential disruptions, to the transformation of industries that is most important to us,” Anderson said.
not so fast now
Alternative finance experts are not disproportionate to Anderson’s bullish stance on Nvidia. Ashwath Damodaran, schoolmaster of finance at New York College’s Stern College of Trade, argues that Nvidia is driving the tide of early AI optimism.
“The momentum is clearly with Nvidia,” Damodaran said. cnbc In May. “They can do no wrong. Everything they touch turns to gold.”
Damodaran said Tesla experienced a similar rally in 2020, when its market cap soared, reaching $1.2 trillion in 2021, only for the stock to decline by about 30% to date. Meta and Google are also facing high competition which has weakened their hold in the tech world. He argued that even as Nvidia has the revenue to recoup its skyrocketing price, the company’s production expectations may be too high. Damodaran said that the AI chip market alone does not use $1 trillion, and the AI market more broadly uses about $2 or $3 trillion, which means that Nvidia will have to create many super AIs to maintain and increase its value. Will have to enter the markets.
“It’s clearly a possibility,” Damodaran said. “But is it plausible? I do not think so.”
Doug Clinton, managing partner of Deepwater Asset Control, said it is too early to say whether Nvidia has the ability to take over Obese Tech’s control of the AI field in the long run. Nvidia’s massive expansion may seem intimidating, however it is sustainable, especially as demand for AI is expected to grow.
“Despite all of our concerns that demand for chips would eventually slow down, we haven’t actually seen a recession happen yet,” Clinton said. yahoo finance Later future. “And it may take longer than we think to slow down.”
Clinton said that given that Nvidia makes up more than 80% of the global GPU semiconductor market, the company will likely continue to experience impressive results in the near future.
“Can Nvidia maintain its dominant position by providing the brains to these artificial intelligence models?”. They said. “I think they can do this for the next three to five years.”
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