A leading tech stock investor expects Nvidia's share price to hit $20,000 in the next decade.
AInvestMonday, Jul 15, 2024 2:10 am ET
1min read
AMZN --
NVDA --
TSLA --

James Anderson, an early-stage tech investor who made his fortune from investments in Tesla and Amazon, said Nvidia's market cap could be $5 trillion in the next decade, more than the combined market cap of the S&P 500. He said Nvidia's potential size would be far greater than ever seen before, and that a $5 trillion market cap for Nvidia would be not a prediction but a possibility, given Nvidia's leadership in AI. Mr. Anderson said that the demand for AI chips in data centers could grow at 60 per cent a year. In the most optimistic scenario, he said, Nvidia's data center revenue could grow at 60 per cent a year and its margins stay constant, which would translate into earnings per share of $1350 and free cash flow per share of about $1000. At a 5 per cent free cash flow yield, that would imply a stock price of $20,000 in 10 years, or a market cap of $4.9 trillion, with a 10 to 15 per cent chance of that happening.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.