Masayoshi Son's Bold Vision: NVIDIA's Undervalued Path to AI Supremacy by 2035

Word on the StreetWednesday, Oct 30, 2024 11:00 pm ET
1min read

Recent remarks from SoftBank's founder Masayoshi Son have sparked interest in the potential trajectory of NVIDIA's stock, which he believes remains "undervalued." Despite NVIDIA's impressive market ascent, positioning it as the world's second largest company by market capitalization, Son argues that the future of artificial intelligence (AI) spells greater horizons. Speaking at the Future Investment Initiative summit, Son emphasized that the relentless growth in AI spending will substantially benefit NVIDIA, given its GPU chips are integral to AI advancements.

The visionary investor sees 2035 as a landmark year when "super AI," defined as intelligence far surpassing that of the human brain, will become a reality. Son envisions a future where such AI systems are 10,000 times more potent than human intellect, necessitating over 200 million GPU chips and a capital expenditure of $9 trillion. Viewing this tremendous investment as feasible, Son suggests its profitability potential justifies the expense.

Reflecting on past investment decisions, Son's perspective on NVIDIA hints at a degree of regret. SoftBank previously held a 4.9% stake in NVIDIA, sold in 2019 for approximately $4 billion. This sale missed over $150 billion in potential value, as SoftBank's initial investment was just $700 million. Earlier this year, Son lamented the premature divestment, acknowledging the "big fish" they let slip.

Underpinning these insights is the current AI investment surge, which has seen NVIDIA's stock climb about 190% this year alone. Recently, NVIDIA briefly surpassed Apple to become the company with the highest market capitalization globally. These developments underscore the firm belief in AI's transformative power and the pivotal role of companies like NVIDIA in steering future technological revolutions.